Board of Directors · Report on Monthly Safety Performance ... Collection Plan Implementation 2....

Board of Directors PO Box 1

Johnson City, TX 78636

Regular Meeting www.pec.coop

~ Agenda ~ Call PEC Toll Free

1-888- 554-4732

Monday, July 19, 2010 10:00 AM PEC Headquarters Auditorium

Board of Directors Revised 7/14/2010

1. Call to Order and Roll Call

10:00 AM Meeting called to order on July 19, 2010 at PEC Headquarters Auditorium, 201 South Avenue F, Johnson City, TX.

2. Employee/Director Recognitions for Approval

A. (Resolution (ID # 1281)) Retirement of Bertha Stafford, after 10 years of service.

B. (Resolution (ID # 1282)) Retirement of Michael F. West, after 38 years of service.

3. Acknowlegement of Texas Lehigh Cement as a winner of the 2010 Texas Environmental Excellence Award

A. Recognition of Texas Lehigh Cement as Winners of 2010 Environmental Excellence Awards

4. Minutes Approval

A. Monday, June 14, 2010 Regular Meeting

B. Saturday, June 19, 2010 Special Meeting

C. Monday, June 28, 2010 Special Organizational Meeting

D. Friday, July 02, 2010 Special Meeting

5. Items from Members

6. Executive Session

A. Competitive Matters:

1. Strategic Planning Firm Options

2. Transmission Line Construction Services

3. Power Transformer Purchases for 2011

B. Real Estate Matters:

1. Real Estate Opportunities

Regular Meeting Agenda July 19, 2010


C. Legal Matters:

1. Attorney-Client Duties and Responsibilities

2. Communication from Quentin Capital

3. Litigation Updates

4. Gunter Litigation

5. Investigation Update

6. Blanco County Tax Appraisal

D. Personnel Matters:

1. Executive Search Firm Options

2. Safety Investigation

3. Compensation of Acting General Manager

4. Compensation of Acting General Counsel

7. 1:30 PM - Reconvene to Regular Meeting

8. Items From Members

9. Executive Session Items

10. Report on Monthly Safety Performance

A. July Safety Report

11. Report on Monthly Operations

A. Monthly Operations Report

12. Informational Items

A. Monthly Informational Items

Total Active Accounts 235,339 (net increase 474)

Total Memberships 198,023 (net increase 28)

Purchase Orders $ 6,138,950.58

Write-off of Uncollectible Accounts $ 207,516.26

Non-electrical Bad Debt Write-off $ 0.00

Power Bill (unaudited)

516,745,265 kWh Current month/yr $ 30,987,973.27 (includes LCRA & AEP)

493,469,467 kWh Previous year $ 33,466,556.58 (includes LCRA & AEP)

13. Chief Financial Officer



A. CFO - Monthly Reports

1. Reports on May 2010 Monthly Financials

B. CFO - Action Items/Other Items

14. Audit Committee

A. AC - Reports

B. AC - Action Items/Other Items

15. Energy Conservation and Renewable Generation Programs Committee.

A. ECRG - Reports

B. ECRG - Action Items/Other Items

16. Financial Strategies, Contracts, and Budget Committee.

A. FSCB - Reports

1. Financial Strategies, Contract and Budget Committee Minutes - May 6, 2010

2. Financial Strategies, Contract and Budget Committee Draft Minutes - June 10, 2010

B. FSCB - Action Items/Other Items

17. Governance, Bylaws and Legal Committee.

A. GBL - Reports

B. GBL - Action Items/Other Items

1. (Resolution (ID # 1266)) Resolution for Disposition of All or a Substantial Portion of the Cooperative’s Property

18. Items From Directors

Larry Landaker

A. (Resolution (ID # 1287)) Reestablishment of Board Special Policy Committees

B. (Resolution (ID # 1288)) Establishment of Additional Board Special Policy Committee - Executive Search Committee

C. (Resolution (ID # 1285)) Appointment of Board Committee Chairperson and Members



D. (Resolution (ID # 1259)) Appointment of TEC Voting Delegates

E. (Resolution (ID # 1275)) Appointment of 2010 NRECA Regional Meeting Voting Delegate

19. General Manager

A. GM - Reports

1. Collection Plan Implementation

2. Whistleblower Administrator Update

3. Lineman Training with Austin Community College

4. Lineman Rodeo

B. GM - Action Items/Other Items

1. (Resolution (ID # 1286)) Appointment of Parlimentarian to Serve at Board Meetings

C. Announcements

20. Future Items for Board Consideration

21. Future Meetings

A. Announce August Regular Board Meeting scheduled for 10 am on August 16, 2010 at the PEC Headquarters.

22. Adjourn

Board of Directors Meeting: 07/19/10 10:00 AM

PO Box 1Johnson City, TX 78636

Sponsors:

RESOLUTION (ID # 1281) DOC ID: 1281

Updated: 7/8/2010 9:33 AM by Pat Gumm Page 1

Subject: Bertha Stafford Retirement Resolution

Submitted By: Theresa Owens

Department: Human Resources

Background:

2.A

Packet Pg. 5

Pedernales Electric Cooperative, Inc.Regular Meeting

July 19, 2010

RESOLUTION (ID # 1281)

Retirement of Bertha Stafford, after 10 years of service.

The State of TexasCounty of Blanco

Whereas, Bertha Stafford will retire from her employment with Pedernales Electric Cooperative, Inc. after faithfully and competently serving the members of PEC in various capacities for 10 years; and,

Whereas, Bertha Stafford has successfully applied her considerable energy, experience, and knowledge to providing the members of Pedernales Electric Cooperative, Inc. with reliable electric service; and,

Whereas, in the course of her employment, Bertha Stafford has earned the friendship and respect of the Directors, Employees, and Members of Pedernales Electric Cooperative, Inc. for whom and with whom she has worked; and,

Whereas, Bertha Stafford’s experience and willingness to serve will be sorely missed by the Members, Employees, and Board of Directors of Pedernales Electric Cooperative, Inc.; and,

Whereas, the Board of Directors of Pedernales Electric Cooperative, Inc. of Johnson City, Texas, thinks it fit and proper that a Resolution be passed and spread upon the minutes recognizing the contributions made by Bertha Stafford;

Now, Therefore, be it resolved by the Board of Directors of Pedernales Electric Cooperative, Inc. of Johnson City, Texas, that all Members, Employees, Officers, and Directors of Pedernales Electric Cooperative, Inc. hereby express their great appreciation to Bertha Staffordand their gratitude for the incalculable service rendered by Bertha Stafford to her fellow employees and friends of Pedernales Electric Cooperative, Inc., and,

Be It Further Resolved that this resolution be delivered to Bertha Stafford.

2.A

Packet Pg. 6



Sponsors:


Updated: 7/8/2010 5:09 PM by Pat Gumm Page 1

Subject: Michael F. West Retirement Resolution



Background:

2.B

Packet Pg. 7


July 19, 2010


Retirement of Michael F. West, after 38 years of service.


Whereas, Michael F. West will retire from his employment with Pedernales Electric Cooperative, Inc. after faithfully and competently serving the members of PEC in various capacities for 38 years; and,

Whereas, Michael F. West has successfully applied his considerable energy, experience, and knowledge to providing the members of Pedernales Electric Cooperative, Inc. with reliable electric service; and,

Whereas, in the course of his employment, Michael F. West has earned the friendship and respect of the Directors, Employees, and Members of Pedernales Electric Cooperative, Inc. for whom and with whom he has worked; and,

Whereas, Michael F. West’s experience and willingness to serve will be sorely missed by the Members, Employees, and Board of Directors of Pedernales Electric Cooperative, Inc.; and,

Whereas, the Board of Directors of Pedernales Electric Cooperative, Inc. of Johnson City, Texas, thinks it fit and proper that a Resolution be passed and spread upon the minutes recognizing the contributions made by Michael F. West;

Now, Therefore, be it resolved by the Board of Directors of Pedernales Electric Cooperative, Inc. of Johnson City, Texas, that all Members, Employees, Officers, and Directors ofPedernales Electric Cooperative, Inc. hereby express their great appreciation to Michael F. Westand their gratitude for the incalculable service rendered by Michael F. West to his fellow employees and friends of Pedernales Electric Cooperative, Inc., and,

Be It Further Resolved that this resolution be delivered to Michael F. West.

2.B

Packet Pg. 8

TCEQ Announces Winners of the 2010 Texas Environmental Excellence Awards FOR IMMEDIATE RELEASE

Wednesday, April 28, 2010 - Nine honorees receive state's highest environmental honor

Contact Andrea Morrow Phone 512-239-5011 Pager 512-896-3727

The Texas Commission on Environmental Quality announced the winners of the 18th annual Texas Environmental Excellence Awards today. These awards recognize nine projects that provide superior resource conservation, waste reduction, and pollution prevention.

Among this year’s honorees are: a company that builds houses almost entirely from reused and recycled materials; a municipal sewerage system that turns organic waste into energy; a wetlands laboratory that preserves and protects sensitive habitats; a community outreach center that forms partnerships to address environmental issues; a cement kiln that seeks the community’s input on ways to improve environmental performance; an electric company that better manages electric power during periods of peak use; a partnership that helped reduce air emissions from feedlots; a water district’s aggressive education campaign on water conservation; and a girl scout’s green-built, environmental education center.

The Texas Environmental Excellence Awards honor individuals, organizations, and businesses that protect our state’s human and natural resources while ensuring clean air, clean water, and the safe management of waste.

“I commend all of these winners for their innovative solutions to improving the environment,” said TCEQ Chairman Bryan W. Shaw, Ph.D.

“The variety in this year’s winners show that everyone has a part to play in protecting and improving our environment,” said TCEQ Commissioner Buddy Garcia.

“It is a pleasure to recognize and promote the continual innovation represented in these high achievers,” said TCEQ Commissioner Carlos Rubinstein.

The TCEQ commissioners will formally present the awards to the winners at the annual awards banquet on May 5, 2010, as part of the TCEQ Environmental Trade Fair and Conference at the Austin Convention Center, May 4–5.

3.A.1

Packet Pg. 9

Att

ach

men

t: T

CE

Q A

nn

ou

nce

s W

inn

ers

of

the

2010

Tex

as E

nvi

ron

men

tal E

xcel

len

ce A

war

ds

(12

64 :

Rec

og

nit

ion

of

Tex

as L

ehig

h C

emen

t)

Commissioners also will make a special presentation of the TCEQ’s Gregg A. Cooke Memorial Award for Exceptional Environmental Excellence honoring the late Carlos Marin, U.S. Commissioner, International Boundary Water Commission. Marin served as IBWC commissioner from 2004 to 2008 and died in a tragic airplane accident while surveying flooded areas of Texas and Mexico. Marin served more than 27 years at the IBWC working on projects that improved the lives of border residents by ensuring clean, safe water and dedicated his life to furthering cooperation between the U.S. and Mexico.

2010 Texas Environmental Excellence Award Winners

AMARILLO Texas AgriLife Research, Texas AgriLife Extension Service, West Texas A&M University, USDA-Agricultural Research Service, and Kansas State University (Category: Agriculture)

BUDA Texas Lehigh Cement Company (Category: Large Business/Nontechnical)

CORPUS CHRISTI Office of Community Outreach at Texas A&M University-Corpus Christi (Category: Civic/Nonprofit Organization)

DALLAS Oncor Electric, Inc. (Category: Large Business/Technical)

FORT WORTH Tarrant Regional Water District (Category: Water Conservation)

HUNTSVILLE Phoenix Commotion (Category: Small Business)

LUBBOCK Sarah Jo Lambert (Category: Youth)

WACO City of Waco Baylor University U.S. Army Corps of Engineers (Category: Education)

3.A.1

Packet Pg. 10

Att

ach

men

t: T

CE

Q A

nn

ou

nce

s W

inn

ers

of

the

2010

Tex

as E

nvi

ron

men

tal E

xcel

len

ce A

war

ds

(12

64 :

Rec

og

nit

ion

of

Tex

as L

ehig

h C

emen

t)

Waco Metropolitan Area Regional Sewerage System (Category: Government)

3.A.1

Packet Pg. 11

Att

ach

men

t: T

CE

Q A

nn

ou

nce

s W

inn

ers

of

the

2010

Tex

as E

nvi

ron

men

tal E

xcel

len

ce A

war

ds

(12

64 :

Rec

og

nit

ion

of

Tex

as L

ehig

h C

emen

t)



Regular Meeting www.pec.coop

~ Minutes ~ Call PEC Toll Free

1-888- 554-4732

Monday, June 14, 2010 10:00 AM PEC Headquarters Auditorium

Board of Directors Page 1 Revised 7/14/2010

1. Call to Order and Roll Call

10:00 AM Meeting called to order on June 14, 2010 at PEC Headquarters Auditorium, 201 South Avenue F, Johnson City, TX.

Attendee Name Title Status ArrivedCristi Clement District 1 Director/Vice President Present 10:00 AMJames Williams District 2 Director Present 10:00 AMKathryn Scanlon District 3 Director/Secretary-Treasurer Present 10:00 AMO.C. Harmon District 4 Director Present 10:00 AMR.B. Felps District 5 Director Present 10:00 AMLarry Landaker District 6 Director/President Present 10:00 AMDr. Patrick Cox District 7 Director Present 10:00 AM

2. Employee/Director Recognitions for Approval

A. (Resolution 2010-50) Retirement of Wesley H. Lewis, after 31 years of service.

General Manager Juan Garza read the resolution recognizing Wesley H. Lewis and presented him with a clock for his years of service.

3. Minutes Approval

A. Monday, May 17, 2010


During the morning session of the regular Board Meeting, the following members spoke on topics including but not limited to the following:

a. Ernest Altgelt - Chris Gunter's invoice for legal services.


A. Competitive Matters:

1. LCRA Contract Provision

B. Legal Matters:

1. Chris Gunter Invoice

2. Investigation Update

4.A

Packet Pg. 12

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Regular Meeting Minutes June 14, 2010


3. Update on Blanco County Appraisal Appeal

C. Real Estate Matters:

1. Update on Real Estate Opportunity

D. Personnel Matters:

1. General Manager

6. 1:00 PM - Reconvene to Regular Meeting

7. Items From Members

During the afternoon session of the Regular Board Meeting, the following spoke on topics including but not limited to the following:

a. Joe Summy - member ballot initiative, proposed increase of number of compensated committee meetings, effects of 2010 Budget on system reliability, community giving proposal.

b. Robert Dedman - PEC Quarterly, resolutions for disposition of cooperative property and member ballot initiative.

8. Actions From Executive Session

President Larry Landaker announced the following actions taken in Executive Session:

The Board approved a motion to terminate Mr. Juan Garza's employment and agreement effective June 30, 2010.

General Manager Juan Garza thanked Dr. Cox and Ms. Scanlon for their support and read a brief statement regarding the termination of his contract and his service to the cooperative.

The Board agreed to a Special Called Meeting of the Board on June 19, 2010 at 10:00 a.m. where they will meet in Executive Session to consider a process for selecting a national search firm to identify a replacement for Mr. Garza, and to consider an Interim General Manager. President Landaker stated that Juan Garza remains in full authority as the General Manager until June 30, 2010.

In addition, President Landaker stated that portions of this afternoon's agenda may be abbreviated.

9. Report on Monthly Safety Performance

A. June Safety Report

Leadership, Education and Development Manager Steve Lucas presented a report on the Cooperative's monthly safety performance as attached.

4.A

Packet Pg. 13

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



10. Report on Monthly Operations

A. Monthly Operations Report

System Engineering Manager Robert Peterson presented a report on the Cooperative's monthly operations as attached. Director James Williams inquired about various projects and requested that in the future the discretionary fund project dollars be included in the Capital Improvement Project (CIP) roll up so that the Board could see those costs. Director Dr. Patrick Cox asked for a correction to the Kyle outage report.

11. Informational Items

A. For the month of May

Total Active Accounts 234,865 (net increase 436 )

Total Memberships 197,995 (net increase 370)

Purchase Orders $ 3,719,942.90

Write-off of Uncollectible Accounts $ 275,531.35

Non-electrical Bad Debt Write-off $ 875.55

Power Bill (unaudited)

381,256,961 kWh Current month/yr $ 23,448,778.73 (includes LCRA & AEP)

369,514,199 kWh Previous year $ 25,707,433.96 (includes LCRA & AEP)

12. Chief Financial Officer

A. CFO - Monthly Reports

1. April 2010 Monthly Financials

Chief Financial Officer Mike Vollmer reported on the consolidated balance sheet, gross margins, statement of cash flows, debt service coverage, operating revenues and expenses forecast, budget comparison, invoices paid over $10,000 and statistical reports.

Activities for the month of May were as follows:Collected bad debt payments of $38,533.Mailed 25,177 second notices.Completed work orders totalling 15.20 miles of overhead and 4.56 miles of

underground line.Set 853 poles.Current number of PEC employees is 893.

B. CFO - Action Items/Other Items

1. (Resolution 2010-46) Capital Credits Allocations for 2009

Chief Financial Officer Mike Vollmer reviewed the attached memo regarding patronage capital allocations for 2009.

4.A

Packet Pg. 14

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



RESULT: ADOPTED [UNANIMOUS]

MOVER: Cristi Clement, District 1 Director/Vice President

SECONDER: Dr. Patrick Cox, District 7 Director

AYES: Clement, Williams, Scanlon, Harmon, Felps, Landaker, Cox

13. Audit Committee

A. AC - Reports

Chairperson Kathy Scanlon stated that the Audit Committee had not met and there was nothing to report.

B. AC - Action Items/Other Items

14. Energy Conservation and Renewable Generation Programs Committee.

A. ECRG - Reports

Chairperson Larry Landaker stated that the Energy Conservation and Renewable Generation Programs Committee had not met and there was nothing to report.

B. ECRG - Action Items/Other Items

15. Financial Strategies, Contracts, and Budget Committee.

A. FSCB - Reports

Chairperson Cristi Clement stated that the Financial Strategies, Contracts and Budget Committee was working on developing a new capital credits policy which should be ready by the end of year. The committee also reviewed the pole inspection contract which is being presented to the Board for consideration.

B. FSCB - Action Items/Other Items

1. (Resolution 2010-47) Pole Inspection Contract


MOVER: R.B. Felps, District 5 Director

SECONDER: O.C. Harmon, District 4 Director


16. Governance, Bylaws and Legal Committee.

A. GBL - Reports

1. GBL Committee Minutes of 5-12-10

Chairperson Dr. Patrick Cox stated that the Governance, Bylaws and Legal Committee recently met and conducted a member forum in Johnson City.

4.A

Packet Pg. 15

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



2. Report on Public Forum of Community Giving

At the forum to hear comments on the community giving program, 13 people spoke and 36 members submitted comments in writing. Members have until July 1 to submit comments.

B. GBL - Action Items/Other Items

1. (Resolution (ID # 1266)) Resolution for Disposition of All or a Substantial Portion of the Cooperative’s Property

Director Dr. Patrick Cox requested that the Board defer the consideration of the resolution on Disposition of Cooperative Property to the July Board meeting. There were no objections.

17. Items From Directors

RB Felps

1. (Resolution 2010-48) Resolution to Permit Member Ballot Initiative

Director RB Felps moved to approve the resolution to Permit Member Ballot Initiative and Director OC Harmon seconded the motion.

Following a brief discussion of the resolution, Director Dr. Patrick Cox moved to table and refer this to the Governance Bylaws and Legal Committee. Director Kathy Scanlon seconded. Directors voted 4-3 to refer to committee with James Williams, OC Harmon, and RB Felps opposed.

RESULT: TABLED [4 TO 3]

MOVER: Dr. Patrick Cox, District 7 Director

SECONDER: Kathryn Scanlon, District 3 Director/Secretary-Treasurer

AYES: Cristi Clement, Kathryn Scanlon, Larry Landaker, Dr. Patrick Cox

NAYS: James Williams, O.C. Harmon, R.B. Felps

2. (Resolution 2010-49) Resolution to Increase the Number of Compensated Committee Meetings

RESULT: DEFEATED [2 TO 4]



AYES: O.C. Harmon, R.B. Felps

NAYS: Cristi Clement, James Williams, Kathryn Scanlon, Larry Landaker

ABSTAIN: Dr. Patrick Cox

18. General Manager

Following a brief recess, the Board reconvened at 3:29 p.m.

A. GM - Reports

4.A

Packet Pg. 16

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



1. Corporate Website Update

Tocquigny representative, Sheila Ferguson, provided an update on the corporate website as presented in the attached power point presentation. President Landaker inquired about the utilization of the Touchstone offerings and also questioned how the members would be kept engaged in our website.

2. Collection Plan Implementation

Member Services Eddie Dauterive presented an update on the collections plan implementation. Mr. Dauterive reviewed a series of reports as attached that will be used to gauge the success of the plan and will be presented to the Board each month. President Larry Landaker asked Mr. Dauterive that if in the future, the collections plan was not working, to notify the Board.

3. Election Update

Governance Officer Pete Slover reported that as of yesterday, a total of 20,009 votes were received with 3,972 by internet and 16,037 by mail. Internet and mail-in voting closed on Friday, June 11th. Members may vote in person at the Annual Meeting on Saturday. Mr. Slover also stated that candidates have an opportunity to receive training from ESC that will qualify them to be observers in the vote tabulation room.

4. Annual Meeting Update

General Manager Juan Garza reported that the Annual Meeting will begin with short video and entertainment will be provided by the "Circuit Breakers," a PEC employee band. There will also be a special flag presentation by Randy Buchanan, a PEC employee who served in Iraq.

B. GM - Action Items/Other Items

C. Announcements

19. Future Items for Board Consideration

20. Future Meetings

Director R.B. Felps inquired if another date was considered for the Special Called Meeting. Following a brief discussion, the Board agreed to keep the Special Called Meeting date and time for 10:00 a.m. on Saturday, June 19, 2010 at the PEC Headquarters. The PEC Annual Meeting will be begin at 2:00 p.m. on Saturday, June 19, 2010 at the PEC Training Center in Johnson City. A Special Organizational Meeting will be held at 10:00 a.m. on June 28, 2010 at the PEC Headquarters. The July Regular Board meeting is scheduled for 10:00 a.m. on July 19, 2010 at the PEC Headquarters.

21. Adjourn

There being no further business to come before the Board of Directors, meeting was adjourned.

4.A

Packet Pg. 17

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



____________________________________ Kathy Scanlon, Secretary APPROVED:

_______________________________________ Larry Landaker, President

4.A

Packet Pg. 18

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:

RESOLUTION 2010-50 DOC ID: 1250

Updated: 6/8/2010 2:08 PM by Renee Oelschleger Page 1

Subject: Wesley H. Lewis Retirement Resolution



Background:

2.A

Packet Pg. 8

4.A

Packet Pg. 19

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Pedernales Electric Cooperative, Inc.Regular MeetingJune 14, 2010

RESOLUTION 2010-50

Retirement of Wesley H. Lewis, after 31 years of service.


Whereas Wesley H. Lewis will retire from his employment with Pedernales Electric Cooperative, Inc. after faithfully and competently serving the members of PEC in various capacities for 31 years; and,

Whereas Wesley H. Lewis has successfully applied his considerable energy, experience, and knowledge to providing the members of Pedernales Electric Cooperative, Inc. with reliable electric service; and,

Whereas, in the course of his employment, Wesley H. Lewis has earned the friendship and respect of the Directors, Employees, and Members of Pedernales Electric Cooperative, Inc. for whom and with whom he has worked; and,

Whereas, Wesley H. Lewis’ experience and willingness to serve will be sorely missed by the Members, Employees, and Board of Directors of Pedernales Electric Cooperative, Inc.; and,

Whereas, the Board of Directors of Pedernales Electric Cooperative, Inc. of Johnson City, Texas, thinks it fit and proper that a Resolution be passed and spread upon the minutes recognizing the contributions made by Wesley H. Lewis;

Now, Therefore, be it resolved by the Board of Directors of Pedernales Electric Cooperative, Inc. of Johnson City, Texas, that all Members, Employees, Officers, and Directors of Pedernales Electric Cooperative, Inc. hereby express their great appreciation to Wesley H. Lewis and their gratitude for the incalculable service rendered by Wesley H. Lewis to his fellow employees and friends of Pedernales Electric Cooperative, Inc., and,

Be It Further Resolved that this resolution be delivered to Wesley H. Lewis.

2.A

Packet Pg. 9

4.A

Packet Pg. 20

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

2.A

Packet Pg. 10

4.A

Packet Pg. 21

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

PEC continues to focus on keeping its workforce safe and the success of keeping our personnel safe is a direct reflection of the commitment to safety by this Board, the Management Team and our entire workforce.

During the month of May :

o Three OSHA reportable accidents: § an employee stepped off the back of a trailer and sprained

his ankle§ employee was pulling wire and injured their shoulder and;§ employee was refusing a transformer when the fuse barrel

came off the hotstick and hit the employee in the mouth.

o One recordable accident§ employee fell approximately 20’ from a pole.

o Zero vehicle accidents reported.

SAFETY INFORMATION - MAY 2010 2009This Month 0 1

Number of Lost-time AccidentsYear to Date *3 *1

This Month 3 2OSHA Reportable Injuries Year to Date 7 5

This Month 1 2Number of Personal Injury Accidents

Year to Date 8 9This Month 0 3

Number of Vehicle AccidentsYear to Date 7 5

This Month 460 567Number of Employees Trained

Year to Date 787 852This Month 1,131 1,336

Class AttendanceYear to Date 7,318 7,700

*All Lost Time Accidents are OSHA Reportable. So the Lost Time is included in the OSHA Reportable numbers for May 2009.

JUNE 2010 SAFETY REPORT

PRESENTED TO THE PEC BOARD OF DIRECTORS

9.A.1

Packet Pg. 11

Att

ach

men

t: S

afet

y_Ju

ne

2010

(12

60 :

Ju

ne

Saf

ety

Rep

ort

)

4.A

Packet Pg. 22

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

June 14, 2010 With Addendum

Page 1 of 4

May Operations Update

I. Introduction: Four parts to the update: - Unique events - Update on construction activities - Update on Maintenance activities - Report on prior month outages

II. Unique Events:

Burnet to Lampasas Transmission Interruption: • Summary

o Transmission interruption caused Burnet Substation Outage (2900 members)

o Three feeders out for approximately 41 minutes (1929 members)

o One feeder out for 65 minutes (971 members) o E. Babe Smith Substation blinked

• Sequence of Events o LCRA Contract tree trimming crews truck snagged a low

communication cable o When cable rebounded, it caused the three phase primary to

slap together causing a phase conductor to burn in two. o The broken phase flipped up into the transmission line and

caused breakers at Lampasas and Burnet to trip. o The Burnet breaker was slow to trip which initiated the breaker

failure scheme at Burnet which opened all 138 kV devices at Burnet including the device feeding PEC’s Transformer.

• Restoration o PEC Operator opened all four breakers from SCADA o LCRA Operator reviewed fault data o Field inspected station equipment o LCRA Operator closed 138 kV devices o PEC Operator closed feeder breakers restoring 2899 members o One member remained out due to failed fuses on three phase

tap • Remediation

o PEC inspected feeder breaker o LCRA will inspect and test slow 138 kV breaker at Burnet o PEC replaced failed fuses o PEC will review coordination on affected feeder

10.A.1

Packet Pg. 12

Att

ach

men

t: O

per

atio

ns

Up

dat

e fo

r M

ay 2

010

[Rev

isio

n 1

] (

1261

: M

on

thly

Op

erat

ion

s R

epo

rt)

4.A

Packet Pg. 23

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


Page 2 of 4

Drive-Thru Hours Update • New Hours are 7:00 AM to 5:30 PM • Effective May 17 • Provides time to close batches

III. Substation Construction Projects:

• Currently 12 projects in various stages • In Design: 5 by consultants • Design Complete: 3 – Buckner’s Boys Ranch, Avery Ranch, and

Johnson City Phillips • In Construction: 3 – Andice, Cedar Valley, and Dobyville • YTD Completions: 3

IV. Distribution Improvement Projects:

• 2010 Projects: 86 • Design Pending: 11 • In Design: 16 • Construction Pending: 9 • In Construction: 28 • YTD Completions: 23

V. Line Extensions:

• Line Extensions under New Policy

March April MayTotal 2007 2805 3384 Completed 1110 1987 2413 Pending 775 733 780 Idle or disconnected 122 85 191

• Line Extensions grandfathered under Old Policy

March April MayNumber 59 49 41 Approximate Miles 34 27 23 Estimated Cost $1,844,000 $1,327,000 $903,325

VI. Feeder Maintenance: • Current forecast is to be complete by December 2011 • Total of 195 feeders • Inspections: April May

- completed 128, 66% 136, 70% - in progress 6 feeders 6 feeders - remaining 61 47

• Construction : April May - completed 67, 34% 71, 36% - in progress 16 feeders 15 feeders - ready 36 40

10.A.1

Packet Pg. 13

Att

ach

men

t: O

per

atio

ns

Up

dat

e fo

r M

ay 2

010

[Rev

isio

n 1

] (

1261

: M

on

thly

Op

erat

ion

s R

epo

rt)

4.A

Packet Pg. 24

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


Page 3 of 4

VII. Vegetation Management: • Goal of program is to provide a coordinated approach to trimming

trees around the cooperative without adversely impacting reliability. • Two steps in the project

1. Vegetation Assessment by qualified professionals 2. Design a program based on the assessment

• Project Team has reviewed the report with Davey Group and has recommended several clarifications.

• Final report and program recommendation will be reviewed with Operations Managers prior to issuance of an RFP for the program.

VIII. Pole Inspection Project:

• Goal of project is to identify poles that need to be replaced and treat the groundline area of the good poles.

• Typical Industry standard is to perform inspections and groundline treatment on a ten year cycle.

• The RFP was released for bid on March 16. • All proposals have been received. • A preliminary winner has been selected and the full proposal will be

presented to the board for approval in June.

IX. Outage Update for May • The index we measure reliability by is SAIDI • Member outage time / active members • SAIDI all – 0.08638 or 5.18 minutes, for 12 months ending May 31

– 1 hour and 1.6 minutes • Excluding planned, transmission and major weather – 3.9 minutes,

for the 12 months ending May 31 – 49.94 minutes • May– 1076 outages from all sources as compared to 842 outages

in April - 467 Prearranged – 2468 members - 391 Lightning – 5918 members - 63 Animals – 1521 members

• The 1076 outages affected in all 20375 members - Total outage time: 1635.12 hours - Customer outage time: 20288.59 hours

• Average duration per outage was 1 hour 31 minutes • Average duration per member affected was 1 hour 31 minutes • Longest outage: 26 hours 45 minutes affecting two members due to

B/O pole falling down. There were trees, rocks, and member owned vehicles in the way. Restoration was delayed until the next day when the vehicles were moved.

10.A.1

Packet Pg. 14

Att

ach

men

t: O

per

atio

ns

Up

dat

e fo

r M

ay 2

010

[Rev

isio

n 1

] (

1261

: M

on

thly

Op

erat

ion

s R

epo

rt)

4.A

Packet Pg. 25

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


Page 4 of 4

• Largest outage: The Burnet to Lampasas Transmission Interruption affecting 2900 members (1929 members for 41 minutes and 971 members for 61 members) at the Burnet Substation.

• Actual largest outage year to date is the Burnet to Lampasas Transmission Interruption causing the Burnet Substation Outage (2900 members) on May 7th.

June 14, 2010 Addendum Kyle Area Outages June 2, 2010

• Thunderstorms moved through the Kyle area Wednesday, June 2 • First outage reported at 7:03pm • Kyle had 31 outages affecting 232 members • All service was restored by 12:15am • 3074 Calls were logged by TFCC • 94 Calls were logged by the call center • An IT network switch at Kyle was affected by Lightning • Knocked out voice and data communications from 7pm until 10:22pm • Kyle Dispatcher relocated to San Marcos Call Center • Oak Hill and Canyon Lake provided dispatch service during transition

10.A.1

Packet Pg. 15

Att

ach

men

t: O

per

atio

ns

Up

dat

e fo

r M

ay 2

010

[Rev

isio

n 1

] (

1261

: M

on

thly

Op

erat

ion

s R

epo

rt)

4.A

Packet Pg. 26

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Electric System CIP2008 2009 2010

Estimated2010YTD

Transmission $877,396 $307,661 $4,376,418 $454,885

Substation 20,538,076 17,799,211 21,516,281 2,567,442

DistributionSystem

49,760,531 50,356,170 32,963,783 14,601,005

DistributionLine Ext.

56,326,891 52,584,869 15,898,710 11,471,918

Total 127,503,394 121,047,911 74,755,192 29,095,250

10.A.1

Packet P

g. 16

Attachment: Operations Update for May 2010 [Revision 1] (1261 : Monthly Operations Report)

4.A

Packet P

g. 27

Minutes Acceptance: Minutes of Jun 14, 2010 10:00 AM (Minutes Approval)



Sponsors:


Updated: 6/7/2010 5:24 PM by Tia Owens Page 1

Subject: Capital Credits Allocations for 2009

Submitted By: Mike Vollmer

Department: Finance

Background:ATTACHMENTS:

• MEV to JG Capital Credits Allocations for 2009 2010-06-07 (PDF)

12.B.1

Packet Pg. 17

4.A

Packet Pg. 28

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


RESOLUTION 2010-46

Capital Credits Allocations for 2009

RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE that operating margins shown in the Cooperative's Audited Consolidated Financial Statements for the year ended December 31, 2009, in the amount of $56,579,994.00, plus a net unbilled revenue amount of $32,000.00, be approved for member allocation. This net amount of $56,611,994.00 shall be allocated on the basis of total gross electric patronage billed for the calendar year 2009 to those patrons having positive billing amounts during the year. The allocation factor calculated for 2009 is .10563684.


MOVER: Cristi Clement, District 1 Director/Vice President

SECONDER: Dr. Patrick Cox, District 7 Director


12.B.1

Packet Pg. 18

4.A

Packet Pg. 29

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

12.B.1.a

Packet Pg. 19

Att

ach

men

t: M

EV

to

JG

Cap

ital

Cre

dit

s A

lloca

tio

ns

for

2009

201

0-06

-07

(R

ES

-201

0-46

: C

apit

al C

red

its

Allo

cati

on

s fo

r 20

09)

4.A

Packet Pg. 30

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:



Subject: Pole Inspection Contract

Submitted By: Renee Oelschleger

Department: General Manager


• Pole Inspection Power Point for Board Meeting 6-14-10 (PDF)

15.B.1

Packet Pg. 20

4.A

Packet Pg. 31

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


RESOLUTION 2010-47

Pole Inspection Contract

RESOLVED BY THE BOARD OF THE DIRECTORS OF THE COOPERATIVE, that a contract with Osmose for a three year pole inspection and treatment program be approved.





15.B.1

Packet Pg. 21

4.A

Packet Pg. 32

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Pedernales Electric Cooperative, Inc.

Pole Inspection Program

June 8, 2010

Robert A. Peterson, P.E.

15.B.1.a

Packet P

g. 22

Attachment: Pole Inspection Power Point for Board Meeting 6-14-10 (RES-2010-47 : Pole Inspection Contract)

4.A

Packet P

g. 33


Historical Perspective

• 290,000 Poles on the PEC System• Last Inspection/Treatment in 2001• 44,403 Poles inspected from 1997 to 2001• 1715 Rejects, a rate of 4%

15.B.1.a

Packet P

g. 23


4.A

Packet P

g. 34


Inspection Process

• Visual Inspection of entire pole• “Sound” the pole as high as practical• Excavate and treat Groundline• Internal treatment if required• Reject if Necessary

15.B.1.a

Packet P

g. 24


4.A

Packet P

g. 35


Accepted Practice

• Bluebonnet EC: 10,000 Poles/Yr• Houston County: 6000 Poles/Yr• CoServe EC: 13,000 Poles/Yr• DETEC: 7000 Poles/Yr• Fannin County: 4000 Poles/Yr• Farmers EC: 7000 Poles/Yr• Oncor (TU): 61,000 Poles/Yr

15.B.1.a

Packet P

g. 25


4.A

Packet P

g. 36


Groundline Treatment

15.B.1.a

Packet P

g. 26


4.A

Packet P

g. 37


Internal Treatment

15.B.1.a

Packet P

g. 27


4.A

Packet P

g. 38


Pole in Service

15.B.1.a

Packet P

g. 28


4.A

Packet P

g. 39


Surface Rot at Groundline

15.B.1.a

Packet P

g. 29


4.A

Packet P

g. 40


Pole With Internal Decay

15.B.1.a

Packet P

g. 30


4.A

Packet P

g. 41



15.B.1.a

Packet P

g. 31


4.A

Packet P

g. 42



15.B.1.a

Packet P

g. 32


4.A

Packet P

g. 43


Pole With Extreme Checking

15.B.1.a

Packet P

g. 33


4.A

Packet P

g. 44


Pole with Shell Rot

15.B.1.a

Packet P

g. 34


4.A

Packet P

g. 45


Split Pole Top

15.B.1.a

Packet P

g. 35


4.A

Packet P

g. 46


Osmose

• In business since 1934• Headquartered in Tyrone,

Georgia

15.B.1.a

Packet P

g. 36


4.A

Packet P

g. 47


Program Total

• 2010 Yearly Cost $1,034,160– 150 Transmission poles– 14,500 Distribution poles



•Based on 25% needing internal treatment and 2.5% rejection rate

15.B.1.a

Packet P

g. 37


4.A

Packet P

g. 48


Questions?

15.B.1.a

Packet P

g. 38


4.A

Packet P

g. 49




Sponsors:

RESOLUTION (ID # 1266) DOC ID: 1266 A

Updated: 6/9/2010 11:07 AM by Renee Oelschleger A Page 1

Subject: Disposition of Property



Background:

16.B.1

Packet Pg. 39

4.A

Packet Pg. 50

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Resolution for Disposition of All or a Substantial Portion of the Cooperative’s Property

POLICY ESTABLISHING PROCEDURES FOR DISPOSITION OFALL OR A SUBSTANTIAL PORTION OF THE COOPERATIVE’S PROPERTY

PEDERNALES ELECTRIC COOPERATIVE, INC.

SUBJECT: Potential Disposition of the Cooperative’s Property

OBJECTIVE: To Establish Certain Standards, Rules and Procedures Applying to Proposals to Purchase the Cooperative’s Property,

RECITALS:

1. Pedernales Electric Cooperative (the “Cooperative”) was created, and for more than 50 years has served, to bring electric service to homes, businesses, farms and ranches in areas where service was not otherwise available;

2. The Cooperative was organized to provide its members with adequate and reliable electric service and to assist its members in the efficient and economical use of energy;

3. The Cooperative is a viable business, which is efficiently performing the services for which it was organized;

4. The Cooperative is also a vital part of the numerous communities which it serves, and as such, has concerns that include the interests of those communities as well as of other constituencies of the Cooperative;

5. The Cooperative is operated as a nonprofit corporation, whereby all revenues not required for payment of its operating and maintenance expenses, principal and interest on its outstanding obligations, and reserves for improvements, new construction, depreciation, and contingencies are allocated to its members in proportion to the amount of business done with such members, as capital credited to the members’ accounts, and those capital credits are retired to the members in accordance with state law and the Articles of Incorporation and Bylaws of the Cooperative;

16.B.1

Packet Pg. 40

4.A

Packet Pg. 51

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

6. The Board of Directors (the “Board”) recognizes the possibility that the Cooperative could in the future receive an unsolicited offer to acquire all or a substantial portion of the Cooperative’s assets of various types (referred to in this Policy as “Property”), whether by purchase, merger, lease, or otherwise;

7. The Board has determined that in order for the Directors to carry out their fiduciary duties to the Cooperative, minimize the costs and disruption to the Cooperative involved in undertaking repeated due diligence reviews, and abide by the terms of its Articles of Incorporation, Bylaws, and any applicable laws or regulations, it is in the best interest of the Cooperative and its members to establish certain procedures to govern the Cooperative’s receipt, consideration, and final action on such an offer; and

8. The Cooperative’s objectives in establishing this Policy are to (i) identify requirements for an unsolicited proposal to be considered as a Qualified Offer, as defined in this Policy; and (ii) identify the process by which a Qualified Offer will be evaluated, in a manner consistent with the Directors’ fulfillment of their fiduciary responsibilities and which will allow assessment of such proposals in sufficient depth to determine whether a sale of the Cooperative’s assets under the terms of the proposal would be in the best interest of the Cooperative and its members.

NOW, THEREFORE, BE IT RESOLVED:

1. That the Board of the Cooperative hereby adopts the following Policy in order to establish certain policies and procedures relating to offers, which shall be followed unless, by an affirmative vote of two-thirds (2/3) of all of the Directors comprising the Board, the Board determines that an exception is required by the particular circumstances;

2. That this Policy is designed only to provide guidance for the Cooperative’s Board and shall not be construed to create rights in the Cooperative’s members, a party submitting an offer to the Cooperative, or any other person, corporation, or other entity; and

3. That this Policy shall not be amended or repealed, except by an affirmative vote of two-thirds (2/3) of all of the Directors comprising the Board.

POLICY:

I. GENERAL POLICY

Article X of the Cooperative’s Bylaws addresses the requirements and procedures to be met and followed with respect to sale of the Cooperative’s properties.

The present unanimous position of the Board is that the Cooperative is not for sale. The sale of all or substantially all of its properties and the transfer to a purchaser of the Cooperative’s consumers and service areas would cause the Cooperative to cease its legal existence (it would be dissolved) and, therefore, unless the sale is to another nonprofit cooperative entity, also to cease furnishing electric service on a cooperative,

16.B.1

Packet Pg. 41

4.A

Packet Pg. 52

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

nonprofit basis. Similarly, the sale of facilities serving a substantial portion of the Cooperative’s service area could significantly affect the Cooperative’s provision of service to the remainder of its service area.

This position of the Board does not mean that a proposal to purchase necessarily would not be recommended by the Board or approved by vote of the Cooperative’s members. Rather, the position is simply that the Board presently views the Cooperative as an excellent, viable cooperative enterprise, performing well and beneficially the services for which it was organized on the basis of the principles and purposes embodied in its organization. Therefore, the Board perceives no need or useful purpose in inviting, much less encouraging, a proposal to purchase. The Board believes special considerations are in order in connection with a proposal made by any prospective purchaser.

II. RULES AND PROCEDURES

In receiving, evaluating and acting upon an unsolicited proposal by a prospective purchaser (“Interested Party”) to purchase all or part of the Cooperative’s Property , the following rules and procedures will be applicable and adhered to except as may otherwise be put into effect by the Board because of its determination that particular circumstances so require:

1. Application of Policy. These rules and procedures shall apply when the proposal is to purchase all or a substantial portion of the Cooperative’s Property representing, in the Board’s determination, all or a substantial portion of the Cooperative’s service area, or when the proposal is for the Cooperative to lease and/or sell such Property.

2. Re-submittal Opportunity/Management Preliminary Determination. Upon its receipt of a proposal, the Cooperative’s Management shall promptly notify the Board in writing and attach a copy of the proposal, provide the Interested Party with a copy of this Policy, and notify the Interested Party in writing that the proposal will be evaluated based on the provisions of this Policy. The Interested Party shall be given not more than ten (10) calendar days after receipt of the Policy to (i) notify the Cooperative of a date certain by which the Interested Party will re-submit its proposal in compliance with the terms of this Policy, or alternatively (ii) notify the Cooperative that it wishes its initial submittal to be considered under the terms of this Policy. If the proposal is timely re-submitted or reconfirmed by the Interested Party, Management shall make a preliminary determination as to whether the proposal constitutes a Qualified Offer, based on the criteria set out below.

3. Qualified Offer Criteria. In order for the proposal to be considered a “Qualified Offer” and, as such, to be officially evaluated and acted upon by the Board, it must

a. be tendered in good faith;

b. be in typewritten/word-processed or printed form;

16.B.1

Packet Pg. 42

4.A

Packet Pg. 53

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

c. reasonably address all substantive aspects of an offer, including specification of an acquisition price and all other material terms, which are binding upon the Interested Party until a specified date or until rejected, and which, if accepted, will, subject to the required legal approval of the Cooperative’s members and any others, ripen into an enforceable contract;

d. not contain provisions that are in conflict with this Policy as determined by the Board, or with the Cooperative’s Articles of Incorporation, Bylaws, or any applicable law or other policies;

e. specify a date, not earlier than 180 days next following the proposal’s (or as, applicable, re-submitted proposal’s) delivery to the Cooperative, on and after which, if not accepted by the Board, the proposal will expire;

f. be accompanied by the name(s), address(es) and telephone number(s) of the person(s) representing the Interested Party with whom Management may communicate and from whom it may secure authoritative answers and decisions relating to the proposal;

g. disclose the identity of the Interested Party and be executed by authorized representatives of the Interested Party;

h. provide substantiation, in reasonable detail satisfactory to the Board, of the financial ability of the Interested Party to finance the transaction described in the proposal;

i. contain an agreement by the Interested Party not to issue press releases or discuss the Qualified Offer with the media without prior written notification to the Cooperative, and to refrain from issuing misleading statements or advertising;

j. indicate facts in the proposal which can be reasonably assessed on an initial basis as providing significant value to the Cooperative in the following areas:

(1) Level of retail rates that would be charged to the Cooperative’s members;

(2) Quality of customer service provided to the Cooperative’s members;

(3) Benefits associated with local presence and support of communities in which the Cooperative’s members reside and in which it provides service; and

(4) Ability of members to participate and have influence in the operation of the Cooperative through their representation on the Board;

16.B.1

Packet Pg. 43

4.A

Packet Pg. 54

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

k. demonstrate adequate financial capability and creditworthiness to implement the proposal, including an indication in writing of the Interested Party’s willingness to deposit with a financial institution mutually agreed to by the parties in an interest-bearing account an administrative cost reserve in the amount of $ 500,000 or such greater amount the Board may determine to be appropriate, promptly upon the Interested Party’s being informed in writing by the Cooperative that the proposal is otherwise qualified for consideration under this Policy. The agreement providing for the administrative cost reserve deposit shall be in a form acceptable to the Cooperative. The administrative cost reserve deposit shall be subject to conditions approved by the Cooperative, including a provision that the principal amount of the deposit may be drawn on by the Cooperative, without reimbursement to the Interested Party, to:

i. pay all costs (including but not limited to accounting, engineering and legal) of studies, reviews, analyses, and appraisals by and for the Cooperative in its evaluation and consideration of the Qualified Offer (including the Cooperative’s internal staff costs associated with such evaluation and consideration), whether or not ultimately accepted; and

ii. pay costs incurred by the Cooperative in seeking regulatory approvals.

If the proposal is withdrawn or rejected, any remaining balance in the administrative cost reserve shall be paid to the Interested Party without interest when the Board certifies that all costs set forth in clauses II.3(k)(i) and II.3(k)(ii) of this section have been paid in full.

4. Board Decision as to Qualified Offer. Based on its application of the foregoing factors to the proposal, management of the Cooperative (“Management”) shall submit its recommendation to the Directors, and the Directors shall make a final determination as to whether the proposal is a Qualified Offer. The Board may accept or reject Management’s recommendation in making its determination.

5. Board Determination Proposal is Not Qualified. If the Board determines that the proposal is not thus qualified, it shall be summarily rejected by the Board. The Interested Party shall have no opportunity to correct or re-submit a proposal that has been rejected by the Board as unqualified. Any subsequent proposal submitted by an Interested Party within two (2) years following the Board’s rejection of the Interested Party’s initial proposal pursuant to this process shall not be considered by the Cooperative, and shall be summarily rejected.

6. Initiation of Phase I and Phase II Evaluations. If the proposal is thus determined to be a Qualified Offer, and the administrative cost reserve provided for in Part II.3(k) is properly deposited under a form of agreement approved by the Board, the Board shall promptly institute the following procedures as Phase I and Phase II of an evaluation process:

16.B.1

Packet Pg. 44

4.A

Packet Pg. 55

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

a. Commencement of Evaluation. Management shall undertake an evaluation of the Qualified Offer. The evaluation shall take into account the provisions of this Policy, including the Standards for Evaluation set out in Part III. Management may retain such consultants, advisors, and outside counsel as it deems appropriate in connection with its evaluation.

b. Communications Liaison. Management shall designate one or more individuals from the Cooperative to receive all communications, including telephone calls and written communications, from the Interested Party, the members, and the media. The designated individual[s] shall understand and follow this Policy, but not have authority to bind the Board or the Cooperative on any matter regarding the Qualified Offer. The Interested Party shall not communicate or discuss the proposal with any Member of the Cooperative other than the designated individual[s].

c. Qualified Offer Copies to Counsel/Loan Effect Inquiries. Management shall send a copy of the Qualified Offer to the Cooperative’s attorney and such other attorneys and advisors as appropriate; and it shall determine through appropriate inquiries the effects of the Qualified Offer upon the Cooperative’s mortgage, loan, or bond documents, or other instruments relating to the Cooperative’s outstanding debt.

d. Rate and Service Quality Comparisons. Management shall obtain a comparison of the Cooperative’s and the Interested Party’s present (if the Interested Party is presently engaged in the provision of electric services) and reasonably foreseeable future rates, fees and charges, assuming the future operation of the Cooperative by the Interested Party, including service extension requirements, other service rules and regulations, adequacy and reliability of service and any other considerations relevant to the provision of electric service.

e. Information From Interested Party. Management shall request detailed information from the Interested Party, such as annual reports, tax returns, and form 10-K filings dating back at least five (5) years; full copies of all relevant audits, internal planning documents, employee policy manuals; a current stockholder or proposed investor list; a list of all pending court and administrative proceedings relevant to the proposed transaction; and any relevant operations manuals, engineering studies, construction plans, and environmental impact statements.

f. Tax Impact Opinion. Management shall request the Interested Party to submit an expert opinion, from such experts acceptable to the Cooperative, setting forth the potential tax liabilities of the transaction to the Cooperative and the members.

g. Phase I Evaluation/Recommendation. If, after Management’s preliminary investigation, which shall be reported to the Board with Management’s recommendation, the Board determines that, based on the findings to date, the Qualified Offer warrants proceeding with the expense of further

16.B.1

Packet Pg. 45

4.A

Packet Pg. 56

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

investigation in greater depth, the Board shall authorize Management to implement a second phase of the investigation.

h. Phase II Evaluation. If the Board has determined that the Qualified Offer justifies further investigation in greater depth, Phase II of the investigation shall be conducted by Management with the following features, and with the assistance of such consultants, advisors, and outside counsel as Management deems appropriate in connection with its evaluation:

(1) Investment Cost Reserve Addition. As a condition of this second phase, the Interested Party shall be required to deposit an additional sum of not less than $750,000 into the administrative cost reserve. The additional deposit amount may be increased if the Directors determine that the Cooperative’s evaluation efforts so require, and the Interested Party shall deposit the additional sum so required.

(2) Cooperative Information. If requested, the Cooperative shall provide additional information to the Interested Party regarding the Cooperative’s finances and operations, subject to the Interested Party’s execution of a confidentiality agreement in form acceptable to the Cooperative.

(3) Revised and Final Proposal. The Interested Party may thereafter submit a revised and final proposal to the Cooperative, reflecting the complete and definitive terms and conditions associated with the proposed transaction that is contemplated by the Qualified Offer.

(4) Valuation Study. In evaluating the Interested Party’s proposal or final proposal (if a revised final proposal is submitted) Management shall obtain reports by two or more independent persons or firms (“valuers”) expert in such matters, utilizing commonly accepted valuation methods, who shall be appointed by the Board and who shall render their respective opinions and findings as to valuation matters specified by Management, which matters may include the following:

(i) the value of the Cooperative’s physical properties and assets,

(ii) the value of its Property interests (including intangible interests such as, for instance, its service area rights),

(iii) the competitive going concern business value of the Cooperative, taking into account the present and reasonably foreseeable future market for its electric services,

16.B.1

Packet Pg. 46

4.A

Packet Pg. 57

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

(iv) the value of new and expanded residential, industrial, commercial and other-type growth that may be reasonably anticipated within the Cooperative’s service areas in the immediate and reasonably foreseeable future,

(v) a comparison of the Cooperative’s and the Interested Party’s present (if the Interested Party is presently engaged in providing electric service) and reasonably foreseeable future adequacy and reliability of service, rates, fees and charges, service rules, regulations and other terms and conditions of service, and

(vi) all other considerations meaningfully bearing upon the ability, willingness, intent, and expected effects of the respective parties in providing electric service. Such reports shall be limited to that portion of the Cooperative’s Property which is the subject of the Qualified Offer, if such offer applies to less than all or substantially all the Cooperative’s Property . Such valuers may also be assigned the responsibility of rendering their opinions as to the value of the loss to the Cooperative’s consumers of a cooperative, mutual benefit organization for providing their electric services on a nonprofit, area-coverage basis at the lowest cost consistent with sound business principles, as opposed to receiving such service from a for-profit investor-owned utility, and as to the effect on the value and continued operations of the Cooperative’s remaining systems, if any. However, Management shall also study the foregoing value factors and report its conclusions to the Board and the Board shall make its own final determination thereof, with the assistance of recommendations made by Management. The Board will give good-faith regard to the reports and opinions of such valuers on all matters covered by their reports and opinions, reserving the right, however, to reject or accept such aspects thereof as the Board, after due consideration, may in its own sole discretion and judgment so determine.

i. Other Phase II Measures. Taking into consideration the provisions of this Policy and the Standards for Evaluation set out in Part III, the Board shall also undertake such other consultations, studies, deliberations and othermeasures and engage such advisors as it deems appropriate and sufficient to enable it to inform itself of all matters that are relevant and material to its decision as to whether to approve and recommend or to reject the Qualified Offer.

7. Notice on Rejection. If the Board rejects the Qualified Offer, it shall promptly so notify the Interested Party.

8. Option for Solicitation Process. If at any point in its evaluation process

16.B.1

Packet Pg. 47

4.A

Packet Pg. 58

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

the Board determines that an expanded process for soliciting proposals from other potentially qualified entities is desirable and in the best interests of the Cooperative and its members, upon a vote of two-thirds of the Directors, such a process may be implemented in lieu of continuing with the procedures set out in this Policy. In such event, the Interested Party will be so informed in writing and any remaining balance in the administrative cost reserve fund shall be paid, without interest, to the Interested Party.

9. Board Approval of Qualified Offer. If, after evaluation and mutual agreement by the Board and the Interested Party to any changes in the Interested Party’s proposed definitive agreement, two-thirds (2/3) of the Directors comprising the Board determine by affirmative vote that the sale, lease, merger, or other acquisition proposed by the Qualified Offer is in the best interest of the Cooperative and its members under the terms of such definitive agreement, the Board shall:

a. formalize such determination by adopting a resolution consistent with the provisions of the Bylaws, and notify the Interested Party of the Cooperative’s intent to further pursue the proposed transaction contemplated by the definitive agreement (“Approved Definitive Agreement”), subject to the necessary approval thereof by the Cooperative’s members and any other required approvals; and subject to agreement by the Interested Party to the following terms and conditions, to be included in the Approved Definitive Agreement:

(1) that the Cooperative is released from or otherwise satisfies its wholesale power contracts;

(2) that any adverse tax impacts upon the Cooperative as an entity and its present and former members will be minimized to the extent practicable;

(3) that all existing employees of the Cooperative are offered continued employment for at least three (3) years upon terms at least equal to those enjoyed by the Cooperative’s employees at the time the Qualified Offer was submitted to the Board with the employment terms to be considered to include wages, salaries, severance benefits, insurance and pension benefits, fringe benefits, rank and job title, place of employment, and residence;

(4) that the total consideration to be paid by the Interested Party will be paid directly to the Cooperative or its account; provided that a Qualified Offer of merger may provide for issuance of stock to the Cooperative’s members in exchange for their capital credits and membership interests;

(5) that the transaction will become void if all regulatory and contractual approvals are not obtained within a reasonable time after member approval;

16.B.1

Packet Pg. 48

4.A

Packet Pg. 59

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

(6) that earnest money in an amount reasonably determined by majority vote of the Board be deposited by the Interested Party with the financial institution referenced in Part II.3(k) of this Policy to ensure the continued good faith commitment of the Interested Party to proceed to consummation of the proposed transaction, under terms determined by the Board; to satisfy this requirement, the Board may designate any remaining portion of the administrative reserve fund not needed for defrayal of evaluation costs to be utilized for such escrow, together with any additional amounts deemed appropriate.

(7) that the members will be notified of the Approved Definitive Agreement and of its substantive features;

(8) that there will be a call of a meeting of the members for the purpose of acting on the proposed transaction contemplated by the Approved Definitive Agreement, consistent with Part II.10 below; and

(9) any other terms and conditions reasonably determined by the Board to be necessary or appropriate in implementing the transaction contemplated by the Qualified Offer for inclusion in the Approved Definitive Agreement.

b. notify the National Rural Utilities Cooperative Finance Corporation (“CFC”) and/or any other applicable lenders of the Cooperative, to the extent such lenders have not already been notified, of the terms of the Approved Definitive Agreement and of the results of the Board’s evaluation process;

c. upon execution by the Interested Party of the Approved Definitive Agreement incorporating the foregoing elements, notify the members that a proposal has been received constituting a Qualified Offer and that has been determined by the Board after the two-phase evaluation process to warrant submittal to the members for their review and determination. The notification shall contain an accurate summary description of the Qualified Offer and of the Approved Definitive Agreement, shall state that the Board has provisionally approved the Approved Definitive Agreement for submittal to the members based on the evaluation process required by this Policy, shall briefly describe the procedures that the Board has followed in evaluating the Qualified Offer and the results of such evaluation, shall provide the name of the person members may contact with questions regarding the Qualified Offer and the evaluation process, and shall apprise the members that a copy of the formal Qualified Offer, relevant materials relating to the evaluation, and the Approved Definitive Agreement may be reviewed or copied by them at the Cooperative’s principal office and area offices at any reasonable hour during normal business days.

10. Procedure for Member Meeting. The conduct of the member meeting

16.B.1

Packet Pg. 49

4.A

Packet Pg. 60

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

and related mail balloting on the Approved Definitive Agreement shall be so undertaken as to minimize the financial cost and operational disruption of the conduct of the Cooperative’s business, consistent with the following:

a. The Board shall promptly fix the time, date and place of the meeting and shall prescribe the wording and method of disseminating, collecting and counting the written ballots to be employed in the voting. In fixing the date of the meeting, the Board shall have due regard for the ability of the members to become fully apprised of the Approved Definitive Agreement so as to enable them to make an informed decision through their votes submitted in connection with the meeting, which shall in any event be called and held in compliance with the Cooperative’s applicable Bylaw provisions.

b. If the Board determines that false or incorrect information is being disseminated by one or more persons, whether in favor of or opposed to the proposed transaction, and that such information may materially affect the outcome of the meeting and election, the Board may abort or withdraw the call of the meeting. Thereafter, the Board may either rescind its determination to approve the Approved Definitive Agreement, if it determines that the Interested Party was responsible, in whole or in substantial part, for the dissemination of such false or incorrect information; or it may reschedule the meeting and voting, conditioned upon the correction of such false or incorrect information by the person(s) responsible and upon their agreement to pay the cost of publishing such corrections in a manner prescribed by the Board, and/or upon their agreement to refrain from disseminating false or incorrect information relative to such newly fixed meeting and voting; and/or the Board may take any other action it deems appropriate in the circumstances.

c. The Board shall otherwise conduct the meeting and the voting, and count and announce the result of the votes cast, in accordance with such plans and procedures as it shall establish in a manner consistent with any applicable provisions of law or of the Cooperative’s Articles of Incorporation or Bylaws.

11. Conditions Applicable on Rejection of Qualified Offer or Approved Definitive Agreement. If the Qualified Offer is rejected, either initially by the Board or by the members in connection with their consideration of the Approved Definitive Agreement, any further proposal from the Interested Party submitting such Qualified Offer within (3) three years thereafter shall be summarily rejected by the Board unless it materially differs from the rejected Qualified Offer and Approved Definitive Agreement.

12. Approval of Approved Definitive Agreement. If the members vote to approve the Approved Definitive Agreement, the Cooperative shall take all actions reasonably necessary to effect the transaction contemplated thereby and, if necessary, dissolve and wind up the business of the Cooperative; provided, however, that it shall be the responsibility of the Interested Party to obtain all necessary

16.B.1

Packet Pg. 50

4.A

Packet Pg. 61

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

regulatory and contractual approvals. Unless such approvals are obtained within such reasonable time as determined by the Board, the proposed transaction shall be deemed terminated and null and void.

III. STANDARDS FOR EVALUATION BY BOARD

After having received and approved the status of a Qualified Offer under Part II.4, in evaluating and acting on a Qualified Offer under Phases I and II of the evaluation process set out in this Policy, the following criteria, as well as any other criteria which the Board may determine to be appropriate under the circumstances, will be taken into account by the Board:

1. Members’ Best Interest. Whether the Qualified Offer is in the best interest of the Cooperative’s members. In determining whether the Qualified Offer is in the members’ best interest, the Board will consider both economic and non-economic matters, both at the present time and for the reasonably foreseeable future.

2. Electric Service Quality. If the Interested Party is engaged in the provision of electric service, the reliability and character of the electric service provided by the Interested Party, at the time of the Qualified Offer and as projected into the reasonably foreseeable future, including timeliness and priority of service restoration after outages, and regard for good engineering and operating standards, as compared with the Cooperative.

3. Consumer Service Quality. If the Interested Party is engaged in the provision of electric service, the character and quality of consumer services provided by the Interested Party as compared with the Cooperative’s, including convenience for consumers of billing and bill-paying procedures, consideration and provision for consumers with special electrical needs or in hardship cases, procedures and personnel available for dealing with consumer complaints, extension/connection/ and reconnection policy with respect to new and existing consumers, concern for property owners and occupants in obtaining rights of way and constructing and maintaining facilities, and courtesy and personal regard in all official relationships with consumers and service applicants.

4. Personnel Effects. Effects on the Cooperative’s existing personnel, with respect to job security and advancement potential in a new organization, level of wages, salaries and fringe benefits, relocation policies, and other applicable policies.

5. Electric Rate Effects. Effects of the proposed transaction contemplated by the Qualified Offer on electric rates and other fees and charges of the Interested Party, compared with the Cooperative’s, looking both at the inception and at the indefinite future (but for a minimum of five years), and also taking into account the value of the Cooperative’s capital credit structure. In addition, the Board may consider how the members’ rates may be impacted in the future by the proposed transaction and the effect of the proposed transaction on the Cooperative’s regulatory status.

6. Community Relationship Effects. Effects of the proposed transaction

16.B.1

Packet Pg. 51

4.A

Packet Pg. 62

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

contemplated by the Qualified Offer on existing relationships of the Cooperative with the communities which it serves or which are adjacent to its service area, and their various civic, educational, business, and other community organizations.

7. Asset Value Comparison. Whether the expected value and profitability of the Cooperative’s Property to the Interested Party, after taking into account, among other relevant factors, the Cooperative’s financial forecasts, are of greater future value to the Cooperative’s members through continued or improved Cooperative operations.

8. Business Organization Comparison. How the Qualified Offer and its expected consequences, if with an investor-owned utility, a municipal utility, or a financial investor, compare with a possible merger or consolidation with one or more other cooperatives.

9. Contract Relations Effects. Effects of the proposed transaction contemplated by the Qualified Offer on present contractual relations of the Cooperative with its wholesale power suppliers, industry associations, CFC and other lenders, and other entities with which the Cooperative has existing executory contracts.

10. Assessment of Total Consideration. Whether the proposal clearly states the total consideration to be paid by the Interested Party and its manner of payment, and makes provision for the discharge of the Cooperative’s liabilities and the retirement and distribution of any surplus consistent with outstanding capital credit accounts, all in accordance with applicable law and the Cooperative’s Articles of Incorporation and Bylaws.

11. Capital Credit Retirement Evaluation. The extent to which the proposed transaction would result in a maximization of value of members’ equity interests in the Cooperative, including the value of and any premium to the value of members’ patronage capital accounts upon retirement, taking into account all relevant considerations relating to the future service of the Cooperative’s end users.

12. Effects of Partial Purchase. Effects on any of the foregoing criteria of a Qualified Offer to purchase Property used by the Cooperative to serve only a portion of its service area and distribution facilities, with respect to the resulting effects on the remaining portions of the Cooperative’s system.

13. Results of Valuation Assessments. The results of the reports concerning the value of the Cooperative. Although the Board shall consider all such information and opinions, it shall have the final responsibility to make the Cooperative’s official determination of value and whether acceptance of the Qualified Offer is in the best interests of the Cooperative and should be presented to the members for approval.

14. Compliance with Laws. Whether the Qualified Offer complies with all applicable laws, regulations, and requirements of the Cooperative’s Articles of Incorporation, Bylaws, and policies, and with all requirements of any of the

16.B.1

Packet Pg. 52

4.A

Packet Pg. 63

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Cooperative’s mortgage, loan, or bond documents.

15. Financial Capability. Whether the Interested Party is financially able to consummate the Qualified Offer. The Board may also consider the source and feasibility of the proposed financing.

16. Solicitation of Other Proposals. Whether the Cooperative should seek other potential bidders for the Cooperative in order to maximize the value of the Cooperative for its members.

17. Environmental Factors. Whether operation of the Cooperative’s facilities and service to its end-users is likely to be conducted by the Interested Party with continuation or enhancement of the Cooperative’s present progressive policies relating to environmental protection, increased use of renewable energy sources and technologies, and energy efficiency, as evidenced by past practice of the Interested Party or credible current commitments.

18. Other Standards. Other standards determined by the Board to be relevant to reasonable assessment of any such Qualified Offer in light of its anticipated effects on the Cooperative’s system and the Cooperative and its members.

The Board, acting in good faith after informing itself of all relevant information and data and after implementation of relevant provisions of this Policy, will decide whether to reject a Qualified Offer or approve and recommend a Qualified Offer in the form of an Approved Definitive Agreement to the members for approval, based upon its determination of what is in the best interests of the Cooperative and its members.

RESPONSIBILITY:

It shall be the responsibility of the Board to implement the provisions of this Policy.

APPROVED , 2010

EFFECTIVE , 2010

CERTIFICATION OF SECRETARY

I , , do hereby certify that the above Policy was adopted by the Board of Directors on , 2010.

_______________________________Secretary

16.B.1

Packet Pg. 53

4.A

Packet Pg. 64

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors: District 5 Director R.B. Felps



Subject: Member Ballot Initiative



Background:

17.1

Packet Pg. 54

4.A

Packet Pg. 65

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


RESOLUTION 2010-48

Resolution to Permit Member Ballot Initiative

BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that by timely delivering to the Board of Directors a petition signed not more than 90 days before such delivery, by no less than 2.5 % of eligible cooperative voters, comprised of no less than 1,000 such voter signatures from each Director District, the members may cause any proposition(s) not inconsistent with governing authority and cooperative purposes to be placed on the ballot to be voted at the next membership meeting.

RESULT: TABLED [4 TO 3]



AYES: Cristi Clement, Kathryn Scanlon, Larry Landaker, Dr. Patrick Cox

NAYS: James Williams, O.C. Harmon, R.B. Felps

17.1

Packet Pg. 55

4.A

Packet Pg. 66

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors: District 5 Director R.B. Felps



Subject: Number of compensated meetings



Background:

17.2

Packet Pg. 56

4.A

Packet Pg. 67

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


RESOLUTION 2010-49

Resolution to Increase the Number of Compensated Committee Meetings

WHEREAS, certain committees of the Board have reached the limit of twelve (12) compensated meetings per year previously approved by the Board; and

WHEREAS, it is in the best interest of the cooperative to conduct additional committee business before the 2010 Annual Meeting:

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE that the limit on compensated committee meetings per year shall be increased from twelve (12) to thirteen (13), calculated from Annual Meeting to Annual Meeting.

RESULT: DEFEATED [2 TO 4]



AYES: O.C. Harmon, R.B. Felps

NAYS: Cristi Clement, James Williams, Kathryn Scanlon, Larry Landaker

ABSTAIN: Dr. Patrick Cox

17.2

Packet Pg. 57

4.A

Packet Pg. 68

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

PEC Website RedesignAgency Project StatusJune Board MeetingJune 14, 2010

18.A.1.a

Packet Pg. 58

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 69

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

2 7/14/2010

2

Tocquigny Measured Approach

§ Our proven methodology unearths deficiencies and other unseen obstacles, triggers positive outcomes, and sustains those results to secure business goals. We call it The Measured Approach.

§ We anchor proven process with PEC’s objectives, then expand our body of knowledge through research, testing, and measurement, which we employ to calibrate each subsequent decision.

§ Throughout Tocquigny’s history, we have adapted The Measured Approachto overcome business hurdles of every complexity and provide confidence, clarity, and precision.

§ With the website redesign, we will demonstrate results through an increase in monthly website traffic, registrations and transactions. Plus, increased rankings in analysts’ annual website rating reports.

18.A.1.a

Packet Pg. 59

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 70

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

3 7/14/2010

3

Executive Summary

§ Research has been instrumental in validating clear direction for the website redesign

§ Seven of eight projects, required prior to construction and implementation, are completed

§ PEC team members from communications, IT and administration have provided exemplary partnership - responsive, patient and PEC fluent

§ Projects are within timeline forecasted in mid March 2010

18.A.1.a

Packet Pg. 60

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 71

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

4

Website Redesign Timeline

7/14/2010

4

18.A.1.a

Packet Pg. 61

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 72

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5

Purpose: Current State of Member Behavior

7/14/2010

5

§ Member Database Analysis

§ Understand the current state of the PEC active member database. § Analyze the data for insights into behavior related to PEC’s secure areas (behind the login) of

the website.§ Leverage findings for forecasting and to demonstrate future performance.

§ Website Analysis & Comparative

§ Evaluate content value, design and features.

§ Outline the strengths, weaknesses, opportunities, and threats relevant to the current site and the online features and functionality.

§ Compare and contrast seven other electricity websites and five non-electricity websites that demonstrate online best practices.

§ Benchmark Metrics Report§ Provide an analytics benchmark of the current PEC site.§ Summarize key insights and understandings of visitor behavior.§ Identify key metrics for future reporting.§ Determine best tools to capture, monitor and report website traffic.

18.A.1.a

Packet Pg. 62

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 73

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

6

Purpose: Audience Needs/Wants

7/14/2010

6

§ Messaging Framework

§ Examine the strengths, weaknesses and cohesiveness of PEC’s current communications.

§ Utilize research to define brand messaging for use in across all PEC communications.

§ Develop PEC positioning statement and tagline, that speaks from the members’ voice. § User Personas Report

§ A qualitative study to define the interests, technology experience levels, and motivations of audiences to interact with the PEC website.

§ Assists in determining desired functionality enhancements to support expectations of the users.§ Brand Assessment & Creative Expression

§ Develop a strong brand with personality and attitude that serves to define and differentiate the cooperative.

§ Define the character, look and feel, visual tone.and copy style of PEC communications to ensure aesthetic continuity.

§ Provide creative direction for the website redesign and other marketing elements.§ Member Segmentation Study

§ Quantitative study to produce member types based on statistical analysis.

§ Study will group PEC members shared attributes and preferences surrounding technology usage, utility needs, financial preferences and communications.

§ Segmentation will assist in guiding functionality requirements and the content strategy for the website redesign.

18.A.1.a

Packet Pg. 63

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 74

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

7 7/14/2010

7

Website Redesign Projects Overview

Current State: Member Behavior• Member Database Analysis• Website Analysis & Comparative• Benchmark Metrics Report

Audience Needs/Wants• User Personas Report• Brand Assessment & Creative

Expression• Messaging Framework• Member Segmentation Study

Website Redesign Plan:• Branding• Messaging• Architecture• Content• Functions/Features

PEC Website Redesign –Launches November 1

Activities – 95% CompleteInputs for Roadmap –25% Complete

§ Leverage findings from research and brand projects to inform the Website Redesign plan.

§ The redesign will meet members' needs, extend their brand engagement and strengthen the cooperative.

18.A.1.a

Packet Pg. 64

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 75

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

8 7/14/2010

8

Member Database Analysis

Key Learnings Opportunities

Cedar Park, Kyle and Liberty Hill districts are the most active online and have the most registrants

Convert maximum % of online members per district to registrations

Highest activity peaks coincide with campaigns such as MyUse

Increase amount of house campaigns to increase website traffic

Website activities (i.e., unique logins, signups, and transactions) are steadily increasing

Encourage online habits through promotions, bill inclusions and other collateral distributions

Approximately 90% of website activity is related to logins and bill payments

To increase frequency of usage provide content and functionality that encourages and requires more than 1x/month action

§ Project 100% Complete

18.A.1.a

Packet Pg. 65

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 76

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

9 7/14/2010

9

Website Analysis & Comparative


The sites found demonstrating best practices fall outside of the utility industry. One utility site, Avista, is a aberration which PEC can certainly aim

Build the website using proven practices that will ensure increased rankings in future analyst reports

Information architecture ranked lowest amongst best practices – links are not recognized; content not residing under typical navigation; rotation elements infrequently visible

Give visual priority to audience needs such as energy conservation, savings, new technology and community involvement

The PEC brand reflects a corporate voice online and the site content that is more relevant, educational and interactive is not at the forefront

Give secondary priority to internal company affairs and documents; replace with enriched content to drive users to educational and interactive information


18.A.1.a

Packet Pg. 66

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 77

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

10 7/14/2010

10

Benchmark Metrics Report


The account section of the site represents over 40% of total traffic

Provide optimal navigation to enriched content

Fewer than 1% of users access educational site content

Enhance and expand menu navigation and information for better visibility of educational content

The most used feature on the site is online bill pay

Improve method to utilize MyUse

Search and social media are under utilized referral sources

Leverage meta tags, keywords and reciprocation links to social media sites


18.A.1.a

Packet Pg. 67

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 78

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

11 7/14/2010

11

Messaging Framework § Project 99% Complete

18.A.1.a

Packet Pg. 68

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 79

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

12 7/14/2010

12

User Personas Report


Research confirmed that members and employees find PEC to be reliable, friendly, service-oriented and responsible

Illustrate the majority perception through creative expression

Highest ranked functionality improvements included e-billing, service outage map and connect/disconnect

Enhance and expand menu functionality and information architecture to meet member expectations – some will occur in release 1 and others in the second release

50/50 split on clear understanding of the cooperative model

Elevate cooperative information and benefits in the redesign


18.A.1.a

Packet Pg. 69

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 80

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

13 7/14/2010

13

Brand Assessment & Creative Expression

Key Deliverables Opportunities

Created mood boards to define and capture the brand vision for the member-owned PEC brand tone

Utilize defined brand attributes, graphical elements, photography style and typography for the PEC brand

The overall brand essence Root all PEC communications in consistent brand messaging themes –PEC is a provider of safe, reliable electricity, a partner to its membership and community and a protector of its employee and member safety.


18.A.1.a

Packet Pg. 70

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 81

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

14 7/14/2010

14

Member Segmentation Study § Project 75% Complete


PEC membership divides into segments based on usage, satisfaction, and payment preferences

Build website and other communication to address the needs of the majority and migrate less involved members to higher involvement

Some responses were related to communications preferences

Leverage learnings to communicate via member preferences and for operational efficiencies

Members don’t utilize content beyond bill paying

Give educational content more prominence for additional interaction and navigation beyond bill paying

18.A.1.a

Packet Pg. 71

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 82

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

15 7/14/2010

15

Website Redesign Plan


Project Purpose:

§ Determine the scope, content, and features of November 1st website release, that includes the following:

§ Audience requirements

§ Release features and functions

§ Detailed business requirements

§ Technical considerations

§ Project plan for implementation

§ Roles & responsibilities

§ Present plan end of June

18.A.1.a

Packet Pg. 72

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 83

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Thank You!

Tocquigny Advertising

401 Congress, Suite 1700

Austin, TX 78701

512-532-2800

18.A.1.a

Packet Pg. 73

Att

ach

men

t: T

ocq

uig

ny

Bo

ard

Mee

tin

g s

lides

- P

roje

cts

Rev

iew

611

10 (

1253

: C

orp

ora

te W

ebsi

te U

pd

ate)

4.A

Packet Pg. 84

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

4, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Write Off as a Percentage of Revenue (KPI)(as of June 1, 2010)

January 2006 to May 2010

2010 Avg.0.63%

2008 Avg.0.54%

2007 Avg.0.60%

2006 Avg.0.57%

2009 Avg.0.60%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

Jan-06Jan-07

Jan-08Jan-09

Jan-10

Perc

enta

ge o

f Wri

te O

ff A

mou

nt to

Bill

ing

Rev

enue

Write Off / Billing Revenue Trend (Linear)

18.A.2.a

Packet P

g. 74

Attachment: Bad Debt Reduction Plan_Board Presentation Graphs_June 14 20101 (1256 : Collection Plan Implementation)

4.A

Packet P

g. 85


$100,000.00

$150,000.00

$200,000.00

$250,000.00

$300,000.00

$350,000.00

$400,000.00

$450,000.00

Jan-09Feb-09Mar-09Apr-09May-09Jun-09Jul-09Aug-09Sep-09Oct-09Nov-09Dec-09Jan-10Feb-10Mar-10Apr-10May-10Jun-10Jul-10Aug-10Sep-10Oct-10Nov-10Dec-10

Write Off Collections(as of June 1, 2010)


Board Approved Write Off Amount Current Write Off Balance

18.A.2.a

Packet P

g. 75


4.A

Packet P

g. 86


$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

Jan-09Feb-09

Mar-09Apr-09

May-09Jun-09

Jul-09Aug-09

Sep-09Oct-09

Nov-09Dec-09

Jan-10Feb-10

Mar-10Apr-10

May-10Jun-10

Jul-10Aug-10

Sep-10Oct-10

Nov-10Dec-10

Internal Collection Efforts(as of June 1, 2010)

January 2009 to June 2010

Pre Write Off Report (30 Days) Board Approved Write Off Amount

10

18.A.2.a

Packet P

g. 76


4.A

Packet P

g. 87


Average Write Off Amounts - Monthly(as of June 1, 2010)

Januray 2006 to June 2010

Current Avg.$426

2009 Avg.$399

2008 Avg.$356

2007 Avg.$351

2006 Avg. $359

$200.00

$250.00

$300.00

$350.00

$400.00

$450.00

$500.00

$550.00

Jan-06Jan-07

Jan-08Jan-09

Jan-10

Aver

age

Writ

e O

ff Am

ount

s

Avg Write Off Amount Trend (Linear)

18.A.2.a

Packet P

g. 77


4.A

Packet P

g. 88


Total 30 Day Delinquency Amounts(as of June 1, 2010)


$1,151,630

$2,169,385$2,205,110

$591,731

$1,506,465

$874,193.92

$500,000

$700,000

$900,000

$1,100,000

$1,300,000

$1,500,000

$1,700,000

$1,900,000

$2,100,000

$2,300,000

$2,500,000

Jan-08Apr-08

Jul-08Oct-08

Jan-09Apr-09

Jul-09Oct-09

Jan-10Apr-10

Jul-10Oct-10

30 D

ay D

elin

guen

t Pay

men

t Am

ount

s

30 Day Delinquency

18.A.2.a

Packet P

g. 78


4.A

Packet P

g. 89




$194,902

$370,431

$132,822

$253,213

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

Jan-08Apr-08

Jul-08Oct-08

Jan-09Apr-09

Jul-09Oct-09

Jan-10Apr-10

Jul-10Oct-10

60 D

ay D

elin

guen

t Pay

men

t Am

ount

s

60 Day Delinquency

18.A.2.a

Packet P

g. 79


4.A

Packet P

g. 90




$40,368

$124,179

$54,153

$99,190

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Jan-08Apr-08

Jul-08Oct-08

Jan-09Apr-09

Jul-09Oct-09

Jan-10Apr-10

Jul-10Oct-10

90 D

ay D

elin

guen

t Pay

men

t Am

ount

s

90 Day Delinquency

18.A.2.a

Packet P

g. 80


4.A

Packet P

g. 91


Total Delinquency Amounts(as of June 1, 2010)


$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

Jan-08Apr-08

Jul-08Oct-08

Jan-09Apr-09

Jul-09Oct-09

Jan-10Apr-10

Jul-10Oct-10

Del

ingu

ent P

aym

ent A

mou

nts

30 Day Delinquency 60 Day Delinquency 90 Day Delinquency

18.A.2.a

Packet P

g. 81


4.A

Packet P

g. 92


Deferred Agreement Amounts(as of June 1, 2010)


$158,708

$332,694

$164,400

$261,948

$114,801$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Jan-08Apr-08

Jul-08Oct-08

Jan-09Apr-09

Jul-09Oct-09

Jan-10Apr-10

Jul-10Oct-10

Def

erre

d Ag

reem

ent A

mou

nts

Deferred Agreements

18.A.2.a

Packet P

g. 82


4.A

Packet P

g. 93




Special Meeting www.pec.coop


1-888- 554-4732

Saturday, June 19, 2010 10:00 AM PEC Headquarters Auditorium


1. Call to Order




During the Special Meeting of the Board of Directors, the following members spoke on topics including but not limited to the following:

a. David Munoz - termination of General Manager Juan Garza.

b. Chris Varela - termination of General Manager Juan Garza and petitions submitted to the Board.

c. Steve Lucas - termination of General Manager Juan Garza.

d. Ted Mason - termination of General Manager Juan Garza.

e. Milton Hawkins - termination of General Manager Juan Garza and selection of interim General Manager.

f. Joe Summy - termination of General Manager Juan Garza.

g. Larry Cotton - termination of General Manager Juan Garza.

h. Carlos Higgins - termination of General Manager Juan Garza.

i. Merle Moden - termination of General Manager Juan Garza.

j. Linda Kaye Rogers - termination of General Manager Juan Garza.

k. John Watson - termination of General Manager Juan Garza.

l. Tom "Smitty" Smith - termination of General Manager Juan Garza.

4.B

Packet Pg. 94

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

9, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Special Meeting Minutes June 19, 2010


Following "Items from Members" Director Dr. Patrick Cox made a statement disagreeing with the actions of the Board to terminate General Manager Juan Garza, but assured that he would continue to work with fellow directors.

President Larry Landaker stated that the meeting will stand in recess until noon.


A. Personnel Matters:

1. Consider Interim General Manager Position

2. Process to select a national firm to fill General Manager position

4. 12:00 PM - Reconvene to Special Meeting

5. Actions From Executive Session

A. (Resolution (ID # 1271)) Appointment of Acting General Manager

General Counsel Luis A. Garcia asked the Board to make this an interim position and to return to his position as General Counsel once the selection of a permanent General Manager has occurred.

RESULT: ADOPTED [5 TO 1]

MOVER: James Williams, District 2 Director

SECONDER: Cristi Clement, District 1 Director/Vice President

AYES: Clement, Williams, Scanlon, Landaker, Cox

NAYS: R.B. Felps

ABSTAIN: O.C. Harmon

B. Process to select a national firm to fill General Manager position

President Landaker announced that no action was taken on the process to select a national firm to fill the General Managers position.

6. Adjourn

A. Signature Certification


____________________________________ Kathy Scanlon, Secretary APPROVED:


4.B

Packet Pg. 95

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

9, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:



Subject: Appointment of Acting General Manager



Background:

5.A

Packet Pg. 3

4.B

Packet Pg. 96

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

9, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Pedernales Electric Cooperative, Inc.Special MeetingJune 19, 2010


Appointment of Acting General Manager

RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the General Counsel Luis A. Garcia of the Cooperative is hereby appointed to serve as Acting General Manager effective July 1, 2010 until such time as a permanent General Manager has been selected subject to the ratification of such action by the newly seated directors at the Board's regularly scheduled July 19, 2010 meeting or at such earlier duly called meeting of the Board.

RESULT: ADOPTED [5 TO 1]

MOVER: James Williams, District 2 Director


AYES: Clement, Williams, Scanlon, Landaker, Cox

NAYS: R.B. Felps

ABSTAIN: O.C. Harmon

5.A

Packet Pg. 4

4.B

Packet Pg. 97

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 1

9, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Special Organizational Meeting www.pec.coop


1-888- 554-4732

Monday, June 28, 2010 10:00 AM PEC Headquarters Auditorium


1. Call to Order




During the Special Organizational Meeting of the Board of Directors, the following members spoke on topics including but not limited to the following:

a. Milton Hawkins - Read e-mail sent to Board Members on June 28, 2009 regarding the Cooperative's mission, policy goals, and use of resources. Presented Chief Financial Officer Mike Vollmer with an endorsed $10 check that was received for completing survey.

b. Ernest Altgelt - Cooperative expenditures, comparison of electric bills.

3. Accept Board Election Results

A. (Resolution 2010-51) Accept 2010 Board Election Results


MOVER: Larry Landaker, District 6 Director/President

SECONDER: R.B. Felps, District 5 Director


4. Recognition of Departing Directors

A. (Resolution 2010-52) Retirement of Director R. B. Felps, after 16 years of service.

Following the adoption of the resolution, Director RB Felps made a brief statement to the Board.

4.C

Packet Pg. 98

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Special Organizational Meeting Minutes June 28, 2010






B. (Resolution 2010-53) Retirement of Director O. C. Harmon, after 34 years of service.

Following the adoption of the resolution, Director OC Harmon made a brief statement to the Board.



SECONDER: James Williams, District 2 Director


C. (Resolution 2010-54) Retirement of Advisory Director Lamont Ramage, after 26 years of service.

Following the adoption of the resolution, Advisory Director-at-Large Lamont Ramage made a brief statement to the Board.





5. Seating of Newly Elected Directors and Execution of Board Affirmation

Following a five minute recess, President Landaker welcomed two new directors, from District 4 - Chris Perry, and District 5 - Ross Fischer.

A. Board Affirmation

General Counsel Luis A. Garcia read the Director Affirmation as attached. Each director gave their verbal affirmation, signed the written Director Affirmations and returned them to the Recording Secretary to be notarized.

6. Election of Officers

President Larry Landaker suggested that there be no discussions or statements during the election of officers and turned the gavel over to Director Cristi Clement for the election of Board President.

Director Cristi Clement read the description of President as stated in Article V, Section 4 of the PEC Bylaws. Director Dr. Patrick Cox nominated Director Kathy Scanlon for President. Director Ross Fischer seconded the nomination. Director James Williams nominated Director Larry Landaker for President. Director Chris Perry seconded the nominations. Directors voted 4-3 to elect Director Larry Landaker as President, with Scanlon, Fischer, and Cox voting for Kathy Scanlon.

President Larry Landaker returned to the gavel and read the description of Vice President as stated in Article V, Section 5 of the PEC Bylaws. Director Cristi Clement nominated Chris Perry

4.C

Packet Pg. 99

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Special Organizational Meeting Minutes June 28, 2010


for Vice President. President Larry Landaker seconded the nomination. Director Kathy Scanlon nominated Ross Fischer for Vice President. Director Dr. Patrick Cox seconded the nomination. Directors voted 4-3 to elect Director Chris Perry as Vice President, with Scanlon, Fischer, and Cox voting for Ross Fischer.

President Larry Landaker read the description for Secretary/Treasurer as stated in Article V, Section 6 and Section 7 the PEC Bylaws. Director Chris Perry nominated Cristi Clement for Secretary/Treasurer. Director James Williams seconded the nomination. Director Patrick Cox nominated Kathy Scanlon for Secretary/Treasurer. Director Ross Fischer seconded the nomination. Directors voted 4-3 to elect Director Cristi Clement as Secretary /Treasurer with Scanlon, Fischer, and Cox for Kathy Scanlon.

7. Adjourn


____________________________________ Cristi Clement, Secretary APPROVED:


4.C

Packet Pg. 100

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:


Updated: 6/23/2010 4:06 PM by Luis Garcia Page 1

Subject: Accept 2010 Board Election Results




• pec 2010 certified results (PDF)

3.A

Packet Pg. 4

4.C

Packet Pg. 101

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Pedernales Electric Cooperative, Inc.Special Organizational Meeting

June 28, 2010

RESOLUTION 2010-51

Accept 2010 Board Election Results

RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the Cooperative accept the attached 2010 election results from the Annual Membership Meeting as presented by Election Services Corporation.



SECONDER: R.B. Felps, District 5 Director


3.A

Packet Pg. 5

4.C

Packet Pg. 102

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

3.A.1

Packet Pg. 6

Att

ach

men

t: p

ec 2

010

cert

ifie

d r

esu

lts

(R

ES

-201

0-51

: A

ccep

t 20

10 B

oar

d E

lect

ion

Res

ult

s)

4.C

Packet Pg. 103

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

3.A.1

Packet Pg. 7

Att

ach

men

t: p

ec 2

010

cert

ifie

d r

esu

lts

(R

ES

-201

0-51

: A

ccep

t 20

10 B

oar

d E

lect

ion

Res

ult

s)

4.C

Packet Pg. 104

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

3.A.1

Packet Pg. 8

Att

ach

men

t: p

ec 2

010

cert

ifie

d r

esu

lts

(R

ES

-201

0-51

: A

ccep

t 20

10 B

oar

d E

lect

ion

Res

ult

s)

4.C

Packet Pg. 105

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:

RESOLUTION 2010-52 DOC ID: 1205 A

Updated: 6/23/2010 5:02 PM by Renee Oelschleger A Page 1

Subject: Director R. B. Felps Retirement Resolution



Background:

4.A

Packet Pg. 9

4.C

Packet Pg. 106

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


June 28, 2010

RESOLUTION 2010-52

Retirement of Director R. B. Felps, after 16 years of service.


Whereas, the Members, Employees, and the Board of Directors of Pedernales Electric Cooperative, Inc. of Johnson City, Texas, regret the resignation of their friend, R. B. Felps; and,

Whereas, Pedernales Electric Cooperative, Inc. is organized to provide reliable electricity to its members; and,

Whereas, R. B. Felps faithfully and competently served on the board for Pedernales Electric Cooperative, Inc. beginning in March 1994 as Advisory Director, District 5, and became a voting director in April 2003. R. B. Felps held the position of Assistant Secretary/Treasurer from June 2003 until July 2008 and then served as Board President until June 2009. He continued as a loyal and dedicated voting member until June 2010; and,

Whereas, R. B. Felps gave strong support to the Employees of Pedernales Electric Cooperative, Inc.; and,

Whereas, R. B. Felps gave liberally of his time, energy, and knowledge to his friends, neighbors, and fellow members of Pedernales Electric Cooperative, Inc.; and,

Whereas, R. B. Felps’ experience and willingness to serve will be sorely missed by the Members, Employees, and Board of Directors of Pedernales Electric Cooperative, Inc.; and,

Whereas, the Board of Directors of Pedernales Electric Cooperative, Inc. thought it fit and proper that a Resolution be passed and spread upon the minutes of the meeting on June 28, 2010, recognizing the contributions made by R. B. Felps;

Now, Therefore, be it resolved by the Board of Directors of Pedernales Electric Cooperative, Inc. that all Members, Employees, Officers, and Directors of Pedernales Electric Cooperative, Inc. hereby express their gratitude for the incalculable services rendered by R. B. Felps to his fellow members and friends of Pedernales Electric Cooperative, Inc.; and,

Be It Further Resolved that the original of this resolution be delivered to R. B. Felps.

4.A

Packet Pg. 10

4.C

Packet Pg. 107

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)





4.A

Packet Pg. 11

4.C

Packet Pg. 108

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:



Subject: Director O. C. Harmon Retirement Resolution



Background:

4.B

Packet Pg. 12

4.C

Packet Pg. 109

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


June 28, 2010

RESOLUTION 2010-53

Retirement of Director O. C. Harmon, after 34 years of service.


Whereas, the Members, Employees, and the Board of Directors of Pedernales Electric Cooperative, Inc. of Johnson City, Texas, regret the resignation of their friend, O. C. Harmon; and,


Whereas, O. C. Harmon faithfully and competently served on the board for Pedernales Electric Cooperative, Inc. beginning in October 1975 as Advisory Director, District 4, and became a voting director in April 1978. O. C. Harmon held the position of Secretary/Treasurer from June 1981 until June 2009. He continued as a loyal and dedicated voting member until June 2010; and,

Whereas, O. C. Harmon gave strong support to the Employees of Pedernales Electric Cooperative, Inc.; and,

Whereas, O. C. Harmon gave liberally of his time, energy, and knowledge to his friends, neighbors, and fellow members of Pedernales Electric Cooperative, Inc.; and,

Whereas, O. C. Harmon’s experience and willingness to serve will be sorely missed by the Members, Employees, and Board of Directors of Pedernales Electric Cooperative, Inc.; and,

Whereas, the Board of Directors of Pedernales Electric Cooperative, Inc. thought it fit and proper that a Resolution be passed and spread upon the minutes of the meeting on June 28, 2010, recognizing the contributions made by O. C. Harmon;

Now, Therefore, be it resolved by the Board of Directors of Pedernales Electric Cooperative, Inc. that all Members, Employees, Officers, and Directors of Pedernales Electric Cooperative, Inc. hereby express their gratitude for the incalculable services rendered by O. C. Harmon to his fellow members and friends of Pedernales Electric Cooperative, Inc.; and,

Be It Further Resolved that the original of this resolution be delivered to O. C. Harmon.

4.B

Packet Pg. 13

4.C

Packet Pg. 110

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



SECONDER: James Williams, District 2 Director


4.B

Packet Pg. 14

4.C

Packet Pg. 111

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:


Updated: 6/23/2010 5:01 PM by Renee Oelschleger A Page 1

Subject: Director Lamont Ramage Retirement Resolution



Background:

4.C

Packet Pg. 15

4.C

Packet Pg. 112

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


June 28, 2010

RESOLUTION 2010-54

Retirement of Advisory Director Lamont Ramage, after 26 years of service.


Whereas, the Members, Employees, and the Board of Directors of Pedernales Electric Cooperative, Inc. of Johnson City, Texas, regret the resignation of their friend, Lamont Ramage; and,


Whereas, Lamont Ramage faithfully and competently served as Advisory Director-at-Large for Pedernales Electric Cooperative, Inc. beginning in June 1984 until his resignation in June 2010; and,

Whereas, Lamont Ramage gave strong support to the Employees of Pedernales Electric Cooperative, Inc.; and,

Whereas, Lamont Ramage gave liberally of his time, energy, and knowledge to his friends, neighbors, and fellow members of Pedernales Electric Cooperative, Inc.; and,

Whereas, Lamont Ramage’s experience and willingness to serve will be sorely missed by the Members, Employees, and Board of Directors of Pedernales Electric Cooperative, Inc.; and,

Whereas, the Board of Directors of Pedernales Electric Cooperative, Inc. thought it fit and proper that a Resolution be passed and spread upon the minutes of the meeting on June 28, 2010, recognizing the contributions made by Lamont Ramage;

Now, Therefore, be it resolved by the Board of Directors of Pedernales Electric Cooperative, Inc. that all Members, Employees, Officers, and Directors of Pedernales Electric Cooperative, Inc. hereby express their gratitude for the incalculable services rendered by Lamont Ramage to his fellow members and friends of Pedernales Electric Cooperative, Inc.; and,

Be It Further Resolved that the original of this resolution be delivered to Lamont Ramage.

4.C

Packet Pg. 16

4.C

Packet Pg. 113

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)





4.C

Packet Pg. 17

4.C

Packet Pg. 114

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 18

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 115

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 19

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 116

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 20

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 117

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 21

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 118

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 22

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 119

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 23

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 120

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 24

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 121

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 25

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 122

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 26

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 123

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 27

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 124

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 28

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 125

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 29

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 126

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 30

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 127

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 31

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 128

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 32

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 129

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 33

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 130

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 34

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 131

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 35

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 132

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 36

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 133

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 37

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 134

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

5.A.1

Packet Pg. 38

Att

ach

men

t: D

irec

tor

Aff

irm

atio

ns

2010

-06-

28 0

01 (

1268

: B

oar

d A

ffir

mat

ion

)

4.C

Packet Pg. 135

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

n 2

8, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Special Meeting www.pec.coop


1-888- 554-4732

Friday, July 2, 2010 10:00 AM PEC Headquarters Auditorium


1. Call to Order

10:00 AM Meeting called to order on July 2, 2010 at PEC Headquarters Auditorium, 201 South Avenue F, Johnson City, TX.

Attendee Name Title Status ArrivedCristi Clement District 1 Director/Secretary-Treasurer Present 10:00 AMJames Williams District 2 Director Absent 10:00 AMKathryn Scanlon District 3 Director Present 10:00 AMChris Perry District 4 Director/Vice President Present 10:00 AMRoss Fischer District 5 Director Present 10:00 AMLarry Landaker District 6 Director/President Present 10:00 AMDr. Patrick Cox District 7 Director Present 10:00 AM


During the Special Meeting of the Board of Directors, the following member spoke on topics including but not limited to the following:

a. Joe Summy - offered congratulations to Luis Garcia, thanked the Board and asked them to consider the employees.

3. Confirm Appointment of Luis A. Garcia as Acting General Manager

A. (Resolution 2010-55) Confirmation and Ratification of Appointment of Acting General Manager

Following the Board's confirmation, Acting General Manager Luis A. Garcia made brief statement.


MOVER: Cristi Clement, District 1 Director/Secretary-Treasurer

SECONDER: Kathryn Scanlon, District 3 Director

AYES: Clement, Scanlon, Perry, Fischer, Landaker, Cox

ABSENT: James Williams

4. Confirm Appointment of Aisha Hagen as Acting General Counsel

A. (Resolution 2010-56) Confirmation of Appointment of Acting General Counsel

Acting General Manager Luis A. Garcia stated that in accordance with Delegation of Authority, the General Manager makes a recommendation and an appointment of a General Counsel before the Board, and asks the Board to confirm the appointment. Acting General Manager Luis A. Garcia asked that Aisha Nawaz Hagen appointment as Acting General Counsel in this interim period be confirmed. Acting General Counsel Aisha Nawaz Hagen gave a brief introductory

4.D

Packet Pg. 136

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

l 2, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Special Meeting Minutes July 2, 2010


statement.


MOVER: Chris Perry, District 4 Director/Vice President




5. Adjourn


____________________________________ Cristi Clement, Secretary APPROVED:


4.D

Packet Pg. 137

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

l 2, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:


Updated: 7/2/2010 9:00 AM by Renee Oelschleger Page 1

Subject: Confirmation of Acting General Manager

Submitted By: Aisha Hagen

Department: Legal Services

Background:

3.A

Packet Pg. 3

4.D

Packet Pg. 138

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

l 2, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

Pedernales Electric Cooperative, Inc.Special Meeting

July 2, 2010

RESOLUTION 2010-55

Confirmation and Ratification of Appointment of Acting General Manager

RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE that General Counsel Luis A. Garcia is hereby confirmed and ratified as Acting General Manager effective July 1, 2010, to serve until a permanent General Manager has been approved by the Board, and at such time, Luis A. Garcia shall then resume his duties as General Counsel of the Cooperative without further confirmation of the Board required.

BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that all actions taken prior to the effective date hereof by the Acting General Manager in such capacity, are hereby confirmed, ratified and approved.






3.A

Packet Pg. 4

4.D

Packet Pg. 139

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

l 2, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:



Subject: Confirmation of Acting General Counsel



Background:

4.A

Packet Pg. 5

4.D

Packet Pg. 140

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

l 2, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


July 2, 2010

RESOLUTION 2010-56

Confirmation of Appointment of Acting General Counsel

RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE that the appointment by the Acting General Manager of Aisha Nawaz Hagen as Acting General Counsel is hereby confirmed effective July 1, 2010 until such time as a permanent General Manager has been approved by the Board.

BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that all actions taken prior to the effective date hereof by the Acting General Counsel in such capacity, are hereby confirmed, ratified and approved.






4.A

Packet Pg. 6

4.D

Packet Pg. 141

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

l 2, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:



Subject: Confirmation of Acting General Manager



Background:

3.A

Packet Pg. 7

4.D

Packet Pg. 142

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

l 2, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


July 2, 2010

RESOLUTION 2010-55

Confirmation and Ratification of Appointment of Acting General Manager

RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE that General Counsel Luis A. Garcia is hereby confirmed and ratified as Acting General Manager effective July 1, 2010, to serve until a permanent General Manager has been approved by the Board, and at such time, Luis A. Garcia shall then resume his duties as General Counsel of the Cooperative without further confirmation of the Board required.

BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that all actions taken prior to the effective date hereof by the Acting General Manager in such capacity, are hereby confirmed, ratified and approved.






3.A

Packet Pg. 8

4.D

Packet Pg. 143

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

l 2, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)



Sponsors:



Subject: Confirmation of Acting General Counsel



Background:

4.A

Packet Pg. 9

4.D

Packet Pg. 144

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

l 2, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)


July 2, 2010

RESOLUTION 2010-56

Confirmation of Appointment of Acting General Counsel

RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE that the appointment by the Acting General Manager of Aisha Nawaz Hagen as Acting General Counsel is hereby confirmed effective July 1, 2010 until such time as a permanent General Manager has been approved by the Board.

BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that all actions taken prior to the effective date hereof by the Acting General Counsel in such capacity, are hereby confirmed, ratified and approved.






4.A

Packet Pg. 10

4.D

Packet Pg. 145

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f Ju

l 2, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

PEC continues to focus on keeping its workforce safe and the success of keeping our personnel safe is a direct reflection of the commitment to safety by this Board, the Management Team and our entire workforce.

During the month of June:

o Four OSHA reportable accidents: § an employee sprained his elbow while removing equipment

from pole§ employee was descending a pole and got splinters in his

wrist§ an employee was bitten by a spider§ an employee had heat related illness

o Two personal injuries – when first aid was administered to a lineman as a result of an electrical flash and; lineman cutout (gaff did not catch pole) and fell from pole.

o Three vehicle accidents reported

SAFETY INFORMATION - JUNE 2010 2009This Month 0 1

Number of Lost-time AccidentsYear to Date *3 *1

This Month 4 2OSHA Reportable Injuries Year to Date 11 7

This Month 2 0Number of Personal Injury Accidents

Year to Date 10 9This Month 3 0

Number of Vehicle AccidentsYear to Date 11 5

This Month 460 738Number of Employees Trained

Year to Date 794 888This Month 1,484 1,800

Class AttendanceYear to Date 8,842 9,507

*All Lost Time Accidents are OSHA Reportable. So the Lost Time is included in the OSHA Reportable numbers for May 2009.

JULY 2010 SAFETY REPORT

PRESENTED TO THE PEC BOARD OF DIRECTORS

10.A.1

Packet Pg. 146

Att

ach

men

t: S

afet

y_Ju

ly 2

010

(12

79 :

Ju

ly S

afet

y R

epo

rt)

July 7, 2010

Page 1 of 4

June Operations Update

I. Introduction: Four parts to the update: - Unique events - Update on construction activities - Update on Maintenance activities - Report on prior month outages

II. Unique Events:

Blockhouse Substation Power Interruption: • Summary

o The substation Bus Differential relay tripped causing all 138KV breakers and circuit switchers to open (6939 members) which interrupted all power to the station.

o Outage time was 3 minutes • Sequence of Events

o The LCRA dispatcher issued switching instructions to the PEC substation maintenance crew switch out a 138kv circuit breaker so a contractor could test line relays.

o The switching orders included instructions to turn “OFF” the Cutoff Switches that disable the relays but that was not done.

o Contractor removed a fuse from the relay panel and the vibration from pulling the fuse caused the relay to operate which tripped both circuit switchers to the power transformers interrupting power to all customers to all customers served from the substation.

• Restoration o Contractor informed LCRA SOCC what caused the outage o The LCRA dispatcher reset the relays. o The LCRA dispatcher closed the 138 kV breakers and circuit

switcher restoring all power. o The PEC substation maintenance crew returned to the

substation and turned off the relay cut-off switches. • Remediation

o PEC substation maintenance personnel will ensure switching orders are completed correctly prior to commencing any work.

Georgetown Office Closure • Convert to drive-thru only services only on July 6. • Drive-thru hours will be 7:00am to 6:30pm. • The office will close completely on August 20. • Letters will be sent to members who made a payment at the office

within the past 12 months. • Signs are posted at the office.

11.A.1

Packet Pg. 147

Att

ach

men

t: O

per

atio

ns

Up

dat

e fo

r Ju

ne

2010

(12

74 :

Mo

nth

ly O

per

atio

ns

Rep

ort

)

July 7, 2010

Page 2 of 4

III. Substation Construction Projects: • Currently 11 projects in various stages • In Design: 6 by consultants • Design Complete: 2 – Avery Ranch, and Johnson City Phillips • In Construction: 3 – Buckner’s Boys Ranch, Andice, and Dobyville • YTD Completions: 4 - Cedar Valley project completed June 30

IV. Distribution Improvement Projects: • 2010 Projects: 99 • Design Pending: 12 • In Design: 16 • Ready to Bid: 5 • In Construction: 33 • YTD Completions: 40

V. Line Extensions:

• Line Extensions under New Policy April May June

Total Year to Date 2805 3384 3945 Completed 1987 2413 2858 Pending 733 780 873 Idle or disconnected 85 191 214

• Line Extensions grandfathered under Old Policy

April May June Number 49 41 25 Approximate Miles 27 23 17 Estimated Cost $1,327,000 $903,325 $739,394

VI. Feeder Maintenance: • Current forecast is to be complete by December 2011 • Total of 195 feeders • Inspections: April May June

- completed 128, 66% 136, 70% 145, 74% - in progress 6 feeders 6 feeders 7 feeders - remaining 61 47 43

• Construction : April May June - completed 67, 34% 71, 36% 78, 40% - in progress 16 feeders 15 feeders 20 feeders - ready 36 40 47

11.A.1

Packet Pg. 148

Att

ach

men

t: O

per

atio

ns

Up

dat

e fo

r Ju

ne

2010

(12

74 :

Mo

nth

ly O

per

atio

ns

Rep

ort

)

July 7, 2010

Page 3 of 4

VII. Vegetation Management: • Goal of program is to provide a coordinated approach to trimming

trees around the system without adversely impacting reliability. • Two steps in the project

1. Vegetation Assessment by qualified professionals 2. Design a program based on the assessment

• Project Team is awaiting final report from the Davey Group. • Final report and program recommendation will be reviewed with

Operations Managers prior to issuance of an RFP for the program.

VIII. Pole Inspection Project: • Goal of project is to identify poles that need to be replaced and

treat the groundline area of the good poles. • The board has approved the project with Osmose as the contractor. • Work schedule and starting locations are established. • Waiting for contract to be returned from Osmose.

IX. Outage Update for June • The index we measure reliability by is SAIDI • SAIDI is Member Outage Time / Active Members • SAIDI all – 9 minutes, for 12 months ending June 30 – 1 hour and

24 seconds. • Excluding planned, transmission and major weather – 8 minutes 13

seconds, for the 12 months ending June 30 – 49 minutes 54 seconds

• June – 1088 outages from all sources as compared to 1076 outages in May

- 464 Weather – 9294 members - 381 Prearranged – 3615 members - 101 Animals – 8125 members

• The 1088 outages affected in all 39647 members - Total outage time: 2037.43 hours - Customer outage time: 35260.56 hours

• Average duration per outage was 1 hour 52 minutes • Average duration per member affected was 53 minutes • Longest outage: 16 hours 21 minutes due to a failed lightning

arrestor. A member had refused to allow PEC to do maintenance on the section of line which served him due to wet pasture conditions. The outage started at 7:14 pm June 2 affecting 10 members. Power to 7 members was restored at 2:15 am June 3 (6 hours 1 minute) by isolating this section of line. Power was restored to 2 more members at 8:08 am (12 hours 54 minutes) by temporarily feeding them from an alternate direction. Power to the

11.A.1

Packet Pg. 149

Att

ach

men

t: O

per

atio

ns

Up

dat

e fo

r Ju

ne

2010

(12

74 :

Mo

nth

ly O

per

atio

ns

Rep

ort

)

July 7, 2010

Page 4 of 4

final member was restored at 11:35 am after locating the failed arrestor and replacing it.

• Largest outage: Blockhouse Substation affecting 6939 members for 3 minutes. On 6/14/2010 at 8:40 am, a contract crew performing maintenance on transmission equipment in the substation accidentally tripped the buss differential relay causing all members being served out of the Blockhouse Substation to lose power. This is the largest outage year to date.

11.A.1

Packet Pg. 150

Att

ach

men

t: O

per

atio

ns

Up

dat

e fo

r Ju

ne

2010

(12

74 :

Mo

nth

ly O

per

atio

ns

Rep

ort

)

CONFIDENTIAL/CLOSED ITEM

( - 152)

11.A.3

Packet Pg. 153

Att

ach

men

t: S

CA

DA

Ou

tag

e R

epo

rt S

um

mar

y fo

r M

on

thly

an

d Y

TD

Exc

lud

ed E

ven

ts (

2 p

ages

) 06

-10

(12

74 :

Mo

nth

ly O

per

atio

ns

Rep

ort

)

11.A.3

Packet Pg. 154

Att

ach

men

t: S

CA

DA

Ou

tag

e R

epo

rt S

um

mar

y fo

r M

on

thly

an

d Y

TD

Exc

lud

ed E

ven

ts (

2 p

ages

) 06

-10

(12

74 :

Mo

nth

ly O

per

atio

ns

Rep

ort

)

11.A.4

Packet Pg. 155

Att

ach

men

t: S

CA

DA

Ou

tag

e R

epo

rt S

um

mar

y fo

r M

on

thly

an

d Y

TD

Incl

ud

ed E

ven

ts (

2 p

ages

) 06

-10

(12

74 :

Mo

nth

ly O

per

atio

ns

Rep

ort

)

11.A.4

Packet Pg. 156

Att

ach

men

t: S

CA

DA

Ou

tag

e R

epo

rt S

um

mar

y fo

r M

on

thly

an

d Y

TD

Incl

ud

ed E

ven

ts (

2 p

ages

) 06

-10

(12

74 :

Mo

nth

ly O

per

atio

ns

Rep

ort

)

SAIDI Indicator for KPI 2009 - 2010

The following table and graph indicates the Statistical Interruption Time per Meter.This is also referred to as the System Average Interruption Duration Index or SAIDI.The number values represent Interruption Time in Hours.The time period is November 1 through October 31 for the KPI factor.Interruptions Exclude Planned, Transmission, and Major Weather and Events.

Interruption SAIDI Excluding Planned, Transmission, and Major Weather and EventsYear Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct08-09 0.05 0.14 0.20 0.24 0.31 0.41 0.48 0.64 0.71 0.78 0.84 0.9009-10 0.06 0.10 0.24 0.26 0.31 0.35 0.42 0.56

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct

SA

IDI (

Hou

rs)

08-09 SAIDI 09-10 SAIDI Platinum Gold Silver

11.A.5

Packet Pg. 157

Att

ach

men

t: S

CA

DA

Pre

sen

t K

PI S

tatu

s fo

r 20

09-2

010

(12

74 :

Mo

nth

ly O

per

atio

ns

Rep

ort

)

Energy Usage and Average TemperatureRolling 2 Year Comparison (Monthly)

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

450,000,000

500,000,000

550,000,000

600,000,000

650,000,000

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

PEC

Sys

tem

Tot

al k

Wh

40

50

60

70

80

90

100

Mon

thly

Avg

. Tem

p. D

egre

es F

.

Monthly KWH - 7/08 thru 6/09 Monthly KWH - 7/09 thru 6/10Average Temperature - 7/08 thru 6/09 Average Temperature - 7/09 thru 6/10

11.A.6

Packet P

g. 158

Attachment: Temperature (Monthly) for June 2010 (1274 : Monthly Operations Report)

Weekly PEC System kWh vs Weekly Avg Air Temp

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

5/25

/09

6/8/

09

6/22

/09

7/6/

09

7/20

/09

8/3/

09

8/17

/09

8/31

/09

9/14

/09

9/28

/09

10/1

2/09

10/2

6/09

11/9

/09

11/2

3/09

12/7

/09

12/2

1/09

1/4/

10

1/18

/10

2/1/

10

2/15

/10

3/1/

10

3/15

/10

3/29

/10

4/12

/10

4/26

/10

5/10

/10

5/24

/10

6/7/

10

6/21

/10

Week Beginning With...

PEC

Sys

tem

kW

h

10

20

30

40

50

60

70

80

90

100

110

Avg

Air

Tem

pera

ture

Air Temp.

PEC System kWh

PEC System kWh

Air Temp.PEC System kWh

Air Temp.

11.A.7

Packet P

g. 159

Attachment: Temperature (Weekly) for June 2010 (1274 : Monthly Operations Report)

GROWTH STATISTICS

YEAR/ ACTIVE NETMONTH ACCOUNTS* INCREASE APPLICATIONS

2008January 221,799 523 3,593February 222,430 631 3,717March 223,190 760 4,000April 223,958 768 3,972May 224,660 702 4,224June 225,331 671 4,356July 225,839 508 4,632August 226,271 432 4,711September 226,764 493 3,848October 227,112 348 3,602November 227,506 394 2,625December 227,890 384 3,315

2009January 228,139 249 2,891February 228,575 436 3,289March 228,976 401 3,583April 229,420 444 3,586May 229,926 506 3,598June 230,457 531 4,287July 230,975 518 2,552August 231,536 561 2,543September 231,727 191 1,929October 231,945 218 1,871November 232,390 445 1,836December 232,753 363 1,660

2010January 233,065 312 1,543February 233,329 264 1,607March 233,903 574 3,772April 234,429 526 1,863May 234,865 436 2,034June 235,339 474 2,220

*"Active Accounts" was formerly identifed as "Number of Consumers." Active Accounts are meters and lights only.

12.A.1

Packet Pg. 160

Att

ach

men

t: R

EP

OR

T G

RO

WT

H S

TA

TIS

TIC

S 2

010-

07-1

9 (

1278

: In

form

atio

nal

Item

s)


REQUEST APPROVAL OF PURCHASE & SERVICE ORDERSFOR THE PERIOD OF JUNE 1-31, 2010

BOARD MEETING DATE: JULY 19, 2010

REQUEST APPROVAL OF PURCHASE ORDERS: $4,406,046.16

REQUEST APPROVAL OF SERVICE ORDERS: $1,732,904.42

GRAND TOTAL: 6,138,950.58$

PURCHASE & SERVICE ORDERS SENT FOR APPROVAL

MONTH 2009 2010

January 5,813,622.98$ 6,062,370.16$

February 5,628,360.99$ 2,663,958.24$

March 5,251,440.95$ 3,763,193.77$

April 5,139,910.63$ 21,961,213.37$

May 3,833,930.62$ 3,719,942.90$

June 4,776,644.49$ 6,138,950.58$

July 4,571,061.89$ -$

August 3,931,944.71$ -$

September 6,425,744.71$ -$

October 5,344,332.61$ -$

November 4,387,678.53$ -$

December 2,956,621.80$ -$

TOTALS: 58,061,294.91$ 44,309,629.02$

12.A.2

Packet Pg. 161

Att

ach

men

t: C

om

bin

ed R

epo

rts

for

JUL

201

0 B

oar

d R

epo

rtA

(12

78 :

Info

rmat

ion

al It

ems)


(Page 162 - 217)


(Page 218)

PEDERNALES ELECTRIC COOPERATIVE, INC.CONSOLIDATED BALANCE SHEETSINCLUDES ACCRUALS FOR UNBILLED REVENUE & COST OF POWERUNAUDITED

May 2010 December 2009ASSETS

UTILITY PLANT:In Service:

Transmission 74,549,631$ 75,797,347$ Distribution 1,045,612,138 1,029,128,400 General & Electric 116,314,150 114,210,414

Utility Plant - in service 1,236,475,919 1,219,136,161 Long-Term Capital Projects 22,069,982 19,069,924

Utility Plant - total 1,258,545,901 1,238,206,085 Accumulated Depreciation (205,927,536) (199,613,545)

Utility Plant - net 1,052,618,365 1,038,592,540

Capital Term Certificates & Other 10,861,021 10,534,061

CURRENT ASSETS:Cash 1,214,572 1,766,624 Short-Term Investments 50,000 4,792,100 Reserve Fund 35,000,000 35,000,000 Contingency Fund 13,000,000 13,000,000 Accounts Receivable:

Members 27,190,980 30,079,427 Other 23,491,087 18,221,123 Allowance for Uncollectible Accts (771,972) (1,395,869)

Accrued Unbilled Revenue 19,843,921 24,094,422 Materials & Supplies 11,336,811 11,348,859 Prepayments & Other 2,801,159 1,171,538

Current Assets - total 133,156,558 138,078,224

DEFERRED CHARGES & OTHER ASSETS:Regulatory Asset - Retirement Benefits 41,160,135 41,160,135 Other Deferred Charges 7,131,637 6,821,948

Deferred Charges & Other Assets - total 48,291,772 47,982,083

TOTAL ASSETS 1,244,927,716$ 1,235,186,908$

page 1 of 5

13.A.1.a

Packet Pg. 219

Att

ach

men

t: F

S f

or

BD

Pkg

- 2

010-

07-1

9 (

1277

: R

epo

rts

on

Mo

nth

ly F

inan

cial

s)

PEDERNALES ELECTRIC COOPERATIVE, INC.CONSOLIDATED BALANCE SHEETSINCLUDES ACCRUALS FOR UNBILLED REVENUE & COST OF POWERUNAUDITED

May 2010 December 2009EQUITY & LIABILITIES

EQUITY:Membership Certificates 9,403,897$ 9,321,417$ Patronage Capital 306,612,519 289,894,035

Equity - total 316,016,416 299,215,452

LONG-TERM DEBT:93 Issue - $80m - 2020 80,000,000 80,000,000 95 Issue -$135m - 2015 53,270,000 53,270,000 02 Issue -$450m - 2032 387,815,000 387,815,000 08 Issue -$300m - 2043 205,000,000 205,000,000

Long-Term Debt - total 726,085,000 726,085,000

CURRENT LIABILITIES:Line of Credit 2,700,000 - Current Maturities of LTD 17,960,000 17,960,000 Accounts Payable 35,849,957 51,630,753 Accrued Taxes 4,812,136 5,263,301 Accrued Interest 1,479,410 5,086,693 Other Current Liabilities 15,682,808 17,912,559

Current Liabilities - total 78,484,311 97,853,306

DEFERRED CREDITS & OTHER NONCURRENT LIABILITIES

Deferred-Capital Credit Payout 9,699,897 9,699,897 Postretirement Benefits Obligation 99,876,286 93,784,785 Other Deferred Credits 14,765,806 8,548,468

Deferred Credits - total 124,341,989 112,033,150

TOTAL EQUITY & LIABILITIES 1,244,927,716$ 1,235,186,908$

Equity as a Percent of Assets 25% 24%

page 2 of 5

13.A.1.a

Packet Pg. 220

Att

ach

men

t: F

S f

or

BD

Pkg

- 2

010-

07-1

9 (

1277

: R

epo

rts

on

Mo

nth

ly F

inan

cial

s)

PEDERNALES ELECTRIC COOPERATIVE, INC.CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSESINCLUDES ACCRUALS FOR UNBILLED REVENUE & COST OF POWERUNAUDITED

May 2010 May 2009 May 2010 May 2009OPERATING REVENUES:

Sale of Electricity 45,462,651$ 45,786,393$ 211,741,743$ 194,736,206$ Other Revenue 2,241,124 2,610,285 11,503,674 13,696,386

Operating Revenues - total 47,703,775 48,396,678 223,245,417 208,432,592

OPERATING & MAINTENANCE EXPENSES:Purchased Power 25,148,579 28,974,971 129,990,443 123,613,448 Transmission Operations 30,365 27,290 149,629 113,570 Transmission Maintenance 104,466 176,213 609,433 362,790 Distribution Operations 2,053,738 1,241,064 9,276,447 5,534,375 Distribution Maintenance 1,472,528 1,280,976 7,699,809 5,813,576 Consumer Accounts 2,147,994 1,489,127 11,127,499 8,356,183 Customer Service & Information 273,190 153,523 966,234 666,788 Economic Development 95,348 112,820 551,052 485,450 Administrative & General 1,850,689 3,813,786 11,914,771 19,742,856 Depreciation 3,192,416 2,865,701 15,860,423 14,924,356 Tax Expense-Property 32,491 452,469 162,455 2,262,345 Tax Expense-Other 363,255 576,480 1,915,680 2,962,818

Operating & Maintenance Exp - total 36,765,059 41,164,420 190,223,875 184,838,555

MARGIN BEFORE INTEREST 10,938,716 7,232,258 33,021,542 23,594,037

INTEREST EXPENSE:Interest on Long-Term Debt 3,480,627 3,570,858 17,332,877 17,783,280 Interest Charged to Construction (133,695) (189,378) (641,101) (848,890) Interest Expense-Other 9,012 199,248 21,367 708,786

Interest Expense - total 3,355,944 3,580,728 16,713,143 17,643,176

MARGIN AFTER INTEREST 7,582,772 3,651,530 16,308,399 5,950,861

OTHER INCOME:Interest Income-Other 180,667 189,304 906,143 628,324 Other Income (expense) 68,886 378 (496,058) (315,088)

Other Income - net 249,553 189,682 410,085 313,236

NET MARGIN (LOSS) 7,832,325$ 3,841,212$ 16,718,484$ 6,264,097$

MTD YTD

Page 3 of 5

13.A.1.a

Packet Pg. 221

Att

ach

men

t: F

S f

or

BD

Pkg

- 2

010-

07-1

9 (

1277

: R

epo

rts

on

Mo

nth

ly F

inan

cial

s)

PEDERNALES ELECTRIC COOPERATIVE, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSINCLUDES ACCRUALS FOR UNBILLED REVENUE & COST OF POWERUNAUDITED

May 2010 May 2009 May 2010 May 2009

CASH FLOWS FROM OPERATING ACTIVITIES:Excess of revenues over (under) expenses 7,832,325$ 3,841,212 16,718,484$ 6,264,097$

Adjustments to reconcile excess of revenuesover (under) expenses to net cash provided(used) by operating activities:

Depreciation & amortization 3,244,809 2,865,700 16,120,735 15,028,832 Provision for uncollectible accounts 143,020 784,831 863,982 1,229,427 Deferred charges for postretirement medical 351,343 231,697 1,812,625 1,413,304 Changes in assets and liabilities:

Accounts receivable, net (5,804,563) (2,194,852) (3,869,397) 6,130,546 Accrued unbilled revenue (6,248,747) (5,241,601) 4,250,501 2,203,056 Materials & supplies (50,328) 868,414 12,048 (365,376) Prepayments & other current assets (729,065) (1,494,727) (1,629,618) (1,395,838) Deferred charges & other assets - 7,904 (570,000) 192,048 Accounts payable 3,514,469 6,697,273 (15,780,798) (21,820,165) Accrued taxes 267,986 282,341 (451,166) (875,187) Accrued interest (15,751,679) (15,986,247) (3,607,286) (3,239,564) Other current liabilities 416,951 3,399,334 (2,229,750) (1,552,969) Other deferred credits & liabilities 1,541,081 1,180,113 10,496,213 4,540,486

Net cash provided (used) by operating activities (11,272,398) (4,758,608) 22,136,573 7,752,697

CASH FLOWS FROM INVESTING ACTIVITIES:Short-term investments 17,250,100 1,652,000 4,742,100 1,150,000 Net additions to property, plant, & equipment (8,288,061) (16,554,835) (29,886,246) (46,306,612) Capital term certificates & other (112,500) (214,462) (326,961) (428,923)

Net cash provided (used) by investing activities 8,849,539 (15,117,297) (25,471,107) (45,585,535)

CASH FLOWS FROM FINANCING ACTIVITIES:Net borrowings under line of credit agreement 2,700,000 27,000,000 2,700,000 38,000,000 Authorized retirement - patronage capital credits - (2,693,943) - (2,693,943) Net increase in membership certificates 19,460 (2,553,615) 82,482 (2,561,485)

Net cash provided (used) by financing activities 2,719,460 21,752,442 2,782,482 32,744,572

Net increase(decrease) in cash & cash equivalents 296,601 1,876,537 (552,052) (5,088,266) Cash & cash equivalents at beginning of period 917,971 (2,990,819) 1,766,624 3,973,984

Cash & cash equivalents at end of period 1,214,572$ (1,114,282)$ 1,214,572$ (1,114,282)$

MTD YTD

Page 4 of 5

13.A.1.a

Packet Pg. 222

Att

ach

men

t: F

S f

or

BD

Pkg

- 2

010-

07-1

9 (

1277

: R

epo

rts

on

Mo

nth

ly F

inan

cial

s)

PEDERNALES ELECTRIC COOPERATIVE INC.CONSOLIDATED DEBT SERVICE COVERAGE COMPLIANCE STATEMENTSINCLUDES ACCRUALS FOR UNBILLED REVENUE & COST OF POWERUNAUDITED

May 2010 December 2009 May 2009

REVENUES:Operating 585,973,686$ 571,160,861$ 561,973,738$ Interest & Dividend Income 2,147,685 1,869,866 1,568,137 Capital Credits 2,385,419 2,385,419 1,424,544

Total Revenues 590,506,790 575,416,146 564,966,419

EXPENSES:Operating 482,883,925 477,498,605 494,274,495

Less: Depreciation (37,642,071) (36,706,004) (35,129,838) Less: Postretirement Medical (4,341,217) (4,208,912) (3,868,014) Plus: Other Deductions 545,474 546,216 460,068

Total Expenses 441,446,111 437,129,905 455,736,711

NET REVENUES 149,060,679$ 138,286,241$ 109,229,708$

DEBT SERVICE:Long-Term Debt Service 58,188,228$ 58,638,631$ 58,838,203$

SURPLUS (DEFICIT) 90,872,451$ 79,647,610$ 50,391,505$

DEBT SERVICE COVERAGE 2.56 2.36 1.86 (Target DSC = 1.7x)

TWELVE MONTHS ENDED

Page 5 of 5

13.A.1.a

Packet Pg. 223

Att

ach

men

t: F

S f

or

BD

Pkg

- 2

010-

07-1

9 (

1277

: R

epo

rts

on

Mo

nth

ly F

inan

cial

s)


(Page 224)

of 4

INVOICES OVER $10,000 VOUCHED TO THE MONTH OF MAY 2010

Detailed and Grouped by GL Account & Payee


Payee NameAcct # AmountObject Description154 GP-Structures & Improvements

124,805.17SecureNet Inc

187 WIP-Dist Overhead

50,382.59Can-fer Utility Services LLC

10,192.50U C Synergetic

188 WIP-Dist Contractor Services


11,493.11Dig Tech Inc

94,320.81Eckhardt Elect Const Inc

321,388.84Infrastrux T & D Services

741,987.04Pike Electric Inc

499,526.01T & D Solutions LLC

361,157.92T & D Solutions Ltd

199 WIP-LT Contractor Serv

194,423.67Dart Construction Company

10,000.00Independence Title Company

51,599.20Scotsman Inc, Williams

313 Invest In Cap Term Cert

112,500.00National Rural Utilities Coop

468 Stores Exp-Clearing

21,016.53Time Warner Cable

485 Prepaid Premium-Employee Insur

59,543.26Guardian Life Insurance Compan

48,810.12Life Insurance Company of Nort

496 Transportation-Clearing

57,322.84Wright Express

569 AP-Received Not Vouchered

155,400.00Adjacent Technologies Inc

41,894.99BKD

6,345.00Bridgepoint Consulting

11,190.00Energized Substation Maintenan

90,136.80Jennings Anderson Ford

73,800.00K B S Electrical Distributors

153,153.00Lambda Construction I Ltd

54,233.91Lower Colorado River Authority

13.A.1.c

Packet Pg. 225

Att

ach

men

t: c

ryst

al r

epo

rts

- in

voic

es o

ver

$10

000-

sum

mar

y-F

inal

201

0-07

-19

(12

77 :

Rep

ort

s o

n M

on

thly

of 4




Payee NameAcct # AmountObject Description 65,490.57Oracle USA, Inc.

38,567.91Pike Electric, Inc.

13,973.85R.O.W. Contracting Corp.

14,180.84Schneider Engineering Inc

11,646.92Software House International

136,814.00Stanley Consultants Inc

14,139.29Stroeher & Son Inc

662,713.26TEC Utility Supply & Service

30,720.00Techline Ltd

346,571.70Texas Electric Cooperatives In

16,608.00Texas Meter & Device Company

33,307.58TIC Energy & Chemical Inc

20,688.00Tidal Power Services LLC

44,037.50Tocquigny

204,159.00Versalift Southwest

570 AP-Misc Accrued Payables

97,893.85JPMorgan Chase Bank

579 Accr Tax-Sales & Use

2,057,400.00Comptroller of Public Accounts

581 Accr Tax-City Franchise

79,764.73Dripping Springs, City of

591 Accr Int-93 Bonds $65m-2020

2,778,750.00Bank of New York Trust Company


663,750.00Bank of New York Trust Company



599 Accr Int-02 Bonds


600 Accr Int-08 CFC Bridge Loan

1,607,164.42National Rural Utilities Coop

694 COP-Purchased For Resale

947,792.15AEP Energy Partners Inc

20,653,045.56Lower Colorado River Authority

13.A.1.c

Packet Pg. 226

Att

ach

men

t: c

ryst

al r

epo

rts

- in

voic

es o

ver

$10

000-

sum

mar

y-F

inal

201

0-07

-19

(12

77 :

Rep

ort

s o

n M

on

thly

of 4




Payee NameAcct # AmountObject Description745 DOE-Misc Distribution Expense

30,994.00Dart Construction Company

760 DME-Poles, Towers & Fixtures


26,885.53Eckhardt Elect Const Inc

761 DME-Underground - Conduit

11,739.38Osmose Utilities Services Inc

766 DME-Tree Trimming

57,857.35Cedar Shark Company

44,311.44Davey Tree Surgery Company

778 Consumer Assist & Records

11,500.00Affiliated Telephone Austin, I

10,483.62ClearTran

47,066.43Information Management Solutio

52,541.37Time Warner Cable

793 Instruct Adver

60,248.32Texas Electric Cooperatives In

794 Instruct Adver-Member Safety

30,873.00Hampton Rogers Associates

820 A&G-Office Supplies

18,530.00Jani-King of Austin

821 A&G-Contract Services

48,610.50Cox Smith Matthews Inc

19,750.00Padgett Stratemann & Company L

826 A&G-Emp Pension & Benefits

39,000.00Johnson City Bank

10,000.00McQueary Henry Bowles Troy LLP

837 A&G-Data Processing

14,291.20Comsys

838 A&G-Annual Meeting

40,808.55Postmaster Johnson City

839 A&G-Rent & Lease Expense

10,968.33Lane LTD, Robb

13.A.1.c

Packet Pg. 227

Att

ach

men

t: c

ryst

al r

epo

rts

- in

voic

es o

ver

$10

000-

sum

mar

y-F

inal

201

0-07

-19

(12

77 :

Rep

ort

s o

n M

on

thly

of 4




Payee NameAcct # AmountObject Description842 A&G-Credit Card Clearing

155,576.09Commercial Card Solutions

844 A&G-Telephone Voucher Clearing

53,591.79A T & T

10,459.49A T & T Mobility

18,522.80Verizon Wireless

951 Misc Non-Oper Income-Expense

-36,004.50Comptroller of Public Accounts

14,918.34Opus Real Estate VIII LP

954 Oth Deducts-Donations

13,653.85P E C United Charities Inc

49,385,987.71

13.A.1.c

Packet Pg. 228

Att

ach

men

t: c

ryst

al r

epo

rts

- in

voic

es o

ver

$10

000-

sum

mar

y-F

inal

201

0-07

-19

(12

77 :

Rep

ort

s o

n M

on

thly


(Page 229)


(Page 230 - 232)

This Month 0.14983 0.17073Year To Date 0.55348 0.59299

Interruption Hours excluding planned, This Month 0.13711 0.15594 transmission, and major weather outages Year To Date 0.45446 0.52031

2010 2009

This Month 0 0Year To Date 7 10

This Month $0 $0Year to Date $190,380 $221,555

This Month 39 53Year To Date 408 396

This Month $187,150 $125,350Year To Date $653,450 $452,700

This Month $18,509 $0Year To Date $22,844 $17,458

2010 2009This Month 27 23

Year to Date 274 120

59,032 60,5708.76 8.33

0:08:29 0:08:33

216 157160 123

13 799,008 96,66229,222 28,957

$5,679,061.76 $4,269,887.7339,165 33,793

5,762 5,1635,187 4,463

28,216 24,167

PEC WEB SITE - JUNE CURRENT MONTH

PREVIOUS MONTH

Total Sessions

Number of Programs Presented

PROGRAMS - JUNE

Historical Use ReportsUnbilled Use Reports

MyUse Activity (Number of Reports including Notifications)Last Billed Use Reports

Payment Total for Month

Level 2 CompletedLevel 3 Completed

Average Pageviews per visitAverage Length of Session (HH:MM:SS)Home Energy Center

Level 1 Completed

Accounts Registered To-DatePayment Count for Month

JUNECONSUMER POWER INTERRUPTION HOURS

Commercial Lighting Rebates $ Paid

Total Interruption Hours

Total Amount of Grants Funded

COMMUNITY RELATIONS - JUNE

Number of Grants Funded

COMMUNITY DEVELOPMENT:

HVAC Rebates $ Paid

Energy Audits Completed

CONSERVATION:

2010 2009

13.A.1.f

Packet Pg. 233

Att

ach

men

t: B

OA

RD

RE

PO

RT

S P

art

B F

OR

201

0-07

-19

(12

77 :

Rep

ort

s o

n M

on

thly

Fin

anci

als)

16.A.1.a

Packet Pg. 234

Att

ach

men

t: F

SC

B C

om

mit

tee

Mtg

Min

ute

s 20

10-0

5-06

001

(12

72 :

Fin

anci

al S

trat

egie

s M

ay 2

010

Min

ute

s)

16.A.1.a

Packet Pg. 235

Att

ach

men

t: F

SC

B C

om

mit

tee

Mtg

Min

ute

s 20

10-0

5-06

001

(12

72 :

Fin

anci

al S

trat

egie

s M

ay 2

010

Min

ute

s)

16.A.1.a

Packet Pg. 236

Att

ach

men

t: F

SC

B C

om

mit

tee

Mtg

Min

ute

s 20

10-0

5-06

001

(12

72 :

Fin

anci

al S

trat

egie

s M

ay 2

010

Min

ute

s)

16.A.1.a

Packet Pg. 237

Att

ach

men

t: F

SC

B C

om

mit

tee

Mtg

Min

ute

s 20

10-0

5-06

001

(12

72 :

Fin

anci

al S

trat

egie

s M

ay 2

010

Min

ute

s)

DRAFTPedernales Electric Cooperative, Inc.

Financial Strategies Committee Meeting

Open Session

Meeting Date & Time: June 10, 2010, 2:30 p.m.

Meeting location: GM Board RoomPedernales Electric Cooperative, Inc. Headquarters 201 South Ave F., Johnson City, TX 78636

Committee Members Kathryn Scanlon – DirectorPresent: Cristi Clement – Director

R.B. Felps

Staff Present: Juan Garza – General ManagerJames Blanton – Assistant General ManagerLuis Garcia – General CounselMike Vollmer – CFORobert Peterson – System Engineering ManagerAisha Hagen – General CounselDale Jones – Power Supply ManagerSusan Veal – Project CoordinatorMonica Williams – Accounting CoordinatorElaine Olaez – Accounting CoordinatorJoan White – Senior AccountantCaroline Tinsley – Communications EditorAline Milam – Administrative Assistant/ScribeSariah Welch – Procurement Supervisor

Members Present: Milton HawkinsJoe Summy

Call to Order:Director Clement called the meeting to order at 2:40 p.m. in the GM Board Room, Pedernales Electric Cooperative, Inc.’s E. Babe Smith Headquarters Building at 201 South Ave. F, Johnson City, TX 78636.

Old Business:The Minutes from the last Financial Strategies, Contracts and Budget Committee Meeting May 6, 2010 were not approved; some changes have to be made.

New Business:

Capital Credit Policy and Factor:

16.A.2.a

Packet Pg. 238

Att

ach

men

t: D

raft

Co

mm

itte

e M

inu

tes

06-1

0-20

10 p

rep

ared

by

Alin

e M

ilam

-Op

en S

essi

on

On

ly (

1276

: F

inan

cial

Str

ateg

ies

Co

mm

itte

e Ju

ne

Pedernales Electric Cooperative, Inc.Financial Strategies Committee Meeting

Page 2

DRAFT

Mike Vollmer will provide a Board approved Community Giving list to the Committee Members. The list will provide the dollar amount so the committee will have a firm base line for 2010. Joan White gave a brief overview of the process we have to calculate the Capital Credit Allocations Factor. The Finance department has completed the process for 2009, and will present this Monday at the Board Meeting. Monica will bring a revised policy for the Committee to review at the next meeting. Cristi would like to start the practice of dating the draft copies so it is easier to keep track of them. Susan added that blueprinting for Capital Credits will be done on August 10, 2010.

Contract Reporting Metric:

Sariah Welch – We are moving forward as we receive new contracts and renewal contracts. In time we will begin to start the back entry process. We currently assign a contract a unique number so we have all of the information on the contract: what district it is in, the function, the dollar amount, dates of the contract and so on.James Blanton – Tommy and Kristina are almost complete in pulling together all of thecontracts that PEC currently holds into Project Management Software. James will have a timeline for the next Committee Meeting. The software will work as a bridge until LINKS is in place.

Delegation of Authority:

Elaine – Employees will be restricted by the amount of funds and the department budget. R.B. mentioned that we need to have some accountability in place for this process.

16.A.2.a

Packet Pg. 239

Att

ach

men

t: D

raft

Co

mm

itte

e M

inu

tes

06-1

0-20

10 p

rep

ared

by

Alin

e M

ilam

-Op

en S

essi

on

On

ly (

1276

: F

inan

cial

Str

ateg

ies

Co

mm

itte

e Ju

ne



Sponsors:

RESOLUTION (ID # 1266) DOC ID: 1266 A


Subject: Disposition of Property



Background:HISTORY:

06/14/10 Board of Directors

Director Dr. Patrick Cox requested that the Board defer the consideration of the resolution on Disposition of Cooperative Property to the July Board meeting. There were no objections.

17.B.1

Packet Pg. 240


July 19, 2010


Resolution for Disposition of All or a Substantial Portion of the Cooperative’s Property

POLICY ESTABLISHING PROCEDURES FOR DISPOSITION OFALL OR A SUBSTANTIAL PORTION OF THE COOPERATIVE’S PROPERTY


SUBJECT: Potential Disposition of the Cooperative’s Property

OBJECTIVE: To Establish Certain Standards, Rules and Procedures Applying to Proposals to Purchase the Cooperative’s Property,

RECITALS:

1. Pedernales Electric Cooperative (the “Cooperative”) was created, and for more than 50 years has served, to bring electric service to homes, businesses, farms and ranches in areas where service was not otherwise available;

2. The Cooperative was organized to provide its members with adequate and reliable electric service and to assist its members in the efficient and economical use of energy;

3. The Cooperative is a viable business, which is efficiently performing the services for which it was organized;

4. The Cooperative is also a vital part of the numerous communities which it serves, and as such, has concerns that include the interests of those communities as well as of other constituencies of the Cooperative;

5. The Cooperative is operated as a nonprofit corporation, whereby all revenues not required for payment of its operating and maintenance expenses, principal and interest on its outstanding obligations, and reserves for improvements, new construction, depreciation, and contingencies are allocated to its members in proportion to the amount of business done with such members, as capital credited to the members’ accounts, and those capital credits are retired to the members in accordance with state law and the Articles of Incorporation and Bylaws of the Cooperative;

17.B.1

Packet Pg. 241

6. The Board of Directors (the “Board”) recognizes the possibility that the Cooperative could in the future receive an unsolicited offer to acquire all or a substantial portion of the Cooperative’s assets of various types (referred to in this Policy as “Property”), whether by purchase, merger, lease, or otherwise;

7. The Board has determined that in order for the Directors to carry out their fiduciary duties to the Cooperative, minimize the costs and disruption to the Cooperative involved in undertaking repeated due diligence reviews, and abide by the terms of its Articles of Incorporation, Bylaws, and any applicable laws or regulations, it is in the best interest of the Cooperative and its members to establish certain procedures to govern the Cooperative’s receipt, consideration, and final action on such an offer; and

8. The Cooperative’s objectives in establishing this Policy are to (i) identify requirements for an unsolicited proposal to be considered as a Qualified Offer, as defined in this Policy; and (ii) identify the process by which a Qualified Offer will be evaluated, in a manner consistent with the Directors’ fulfillment of their fiduciary responsibilities and which will allow assessment of such proposals in sufficient depth to determine whether a sale of the Cooperative’s assets under the terms of the proposal would be in the best interest of the Cooperative and its members.

NOW, THEREFORE, BE IT RESOLVED:

1. That the Board of the Cooperative hereby adopts the following Policy in order to establish certain policies and procedures relating to offers, which shall be followed unless, by an affirmative vote of two-thirds (2/3) of all of the Directors comprising the Board, the Board determines that an exception is required by the particular circumstances;

2. That this Policy is designed only to provide guidance for the Cooperative’s Board and shall not be construed to create rights in the Cooperative’s members, a party submitting an offer to the Cooperative, or any other person, corporation, or other entity; and

3. That this Policy shall not be amended or repealed, except by an affirmative vote of two-thirds (2/3) of all of the Directors comprising the Board.

POLICY:

I. GENERAL POLICY

Article X of the Cooperative’s Bylaws addresses the requirements and procedures to be met and followed with respect to sale of the Cooperative’s properties.

The present unanimous position of the Board is that the Cooperative is not for sale. The sale of all or substantially all of its properties and the transfer to a purchaser of the Cooperative’s consumers and service areas would cause the Cooperative to cease its legal existence (it would be dissolved) and, therefore, unless the sale is to another nonprofit cooperative entity, also to cease furnishing electric service on a cooperative,

17.B.1

Packet Pg. 242

nonprofit basis. Similarly, the sale of facilities serving a substantial portion of the Cooperative’s service area could significantly affect the Cooperative’s provision of service to the remainder of its service area.

This position of the Board does not mean that a proposal to purchase necessarily would not be recommended by the Board or approved by vote of the Cooperative’s members. Rather, the position is simply that the Board presently views the Cooperative as an excellent, viable cooperative enterprise, performing well and beneficially the services for which it was organized on the basis of the principles and purposes embodied in its organization. Therefore, the Board perceives no need or useful purpose in inviting, much less encouraging, a proposal to purchase. The Board believes special considerations are in order in connection with a proposal made by any prospective purchaser.

II. RULES AND PROCEDURES

In receiving, evaluating and acting upon an unsolicited proposal by a prospective purchaser (“Interested Party”) to purchase all or part of the Cooperative’s Property , the following rules and procedures will be applicable and adhered to except as may otherwise be put into effect by the Board because of its determination that particular circumstances so require:

1. Application of Policy. These rules and procedures shall apply when the proposal is to purchase all or a substantial portion of the Cooperative’s Property representing, in the Board’s determination, all or a substantial portion of the Cooperative’s service area, or when the proposal is for the Cooperative to lease and/or sell such Property.

2. Re-submittal Opportunity/Management Preliminary Determination. Upon its receipt of a proposal, the Cooperative’s Management shall promptly notify the Board in writing and attach a copy of the proposal, provide the Interested Party with a copy of this Policy, and notify the Interested Party in writing that the proposal will be evaluated based on the provisions of this Policy. The Interested Party shall be given not more than ten (10) calendar days after receipt of the Policy to (i) notify the Cooperative of a date certain by which the Interested Party will re-submit its proposal in compliance with the terms of this Policy, or alternatively (ii) notify the Cooperative that it wishes its initial submittal to be considered under the terms of this Policy. If the proposal is timely re-submitted or reconfirmed by the Interested Party, Management shall make a preliminary determination as to whether the proposal constitutes a Qualified Offer, based on the criteria set out below.

3. Qualified Offer Criteria. In order for the proposal to be considered a “Qualified Offer” and, as such, to be officially evaluated and acted upon by the Board, it must

a. be tendered in good faith;

b. be in typewritten/word-processed or printed form;

17.B.1

Packet Pg. 243

c. reasonably address all substantive aspects of an offer, including specification of an acquisition price and all other material terms, which are binding upon the Interested Party until a specified date or until rejected, and which, if accepted, will, subject to the required legal approval of the Cooperative’s members and any others, ripen into an enforceable contract;

d. not contain provisions that are in conflict with this Policy as determined by the Board, or with the Cooperative’s Articles of Incorporation, Bylaws, or any applicable law or other policies;

e. specify a date, not earlier than 180 days next following the proposal’s (or as, applicable, re-submitted proposal’s) delivery to the Cooperative, on and after which, if not accepted by the Board, the proposal will expire;

f. be accompanied by the name(s), address(es) and telephone number(s) of the person(s) representing the Interested Party with whom Management may communicate and from whom it may secure authoritative answers and decisions relating to the proposal;

g. disclose the identity of the Interested Party and be executed by authorized representatives of the Interested Party;

h. provide substantiation, in reasonable detail satisfactory to the Board, of the financial ability of the Interested Party to finance the transaction described in the proposal;

i. contain an agreement by the Interested Party not to issue press releases or discuss the Qualified Offer with the media without prior written notification to the Cooperative, and to refrain from issuing misleading statements or advertising;

j. indicate facts in the proposal which can be reasonably assessed on an initial basis as providing significant value to the Cooperative in the following areas:

(1) Level of retail rates that would be charged to the Cooperative’s members;

(2) Quality of customer service provided to the Cooperative’s members;

(3) Benefits associated with local presence and support of communities in which the Cooperative’s members reside and in which it provides service; and

(4) Ability of members to participate and have influence in the operation of the Cooperative through their representation on the Board;

17.B.1

Packet Pg. 244

k. demonstrate adequate financial capability and creditworthiness to implement the proposal, including an indication in writing of the Interested Party’s willingness to deposit with a financial institution mutually agreed to by the parties in an interest-bearing account an administrative cost reserve in the amount of $ 500,000 or such greater amount the Board may determine to be appropriate, promptly upon the Interested Party’s being informed in writing by the Cooperative that the proposal is otherwise qualified for consideration under this Policy. The agreement providing for the administrative cost reserve deposit shall be in a form acceptable to the Cooperative. The administrative cost reserve deposit shall be subject to conditions approved by the Cooperative, including a provision that the principal amount of the deposit may be drawn on by the Cooperative, without reimbursement to the Interested Party, to:

i. pay all costs (including but not limited to accounting, engineering and legal) of studies, reviews, analyses, and appraisals by and for the Cooperative in its evaluation and consideration of the Qualified Offer (including the Cooperative’s internal staff costs associated with such evaluation and consideration), whether or not ultimately accepted; and

ii. pay costs incurred by the Cooperative in seeking regulatory approvals.

If the proposal is withdrawn or rejected, any remaining balance in the administrative cost reserve shall be paid to the Interested Party without interest when the Board certifies that all costs set forth in clauses II.3(k)(i) and II.3(k)(ii) of this section have been paid in full.

4. Board Decision as to Qualified Offer. Based on its application of the foregoing factors to the proposal, management of the Cooperative (“Management”) shall submit its recommendation to the Directors, and the Directors shall make a final determination as to whether the proposal is a Qualified Offer. The Board may accept or reject Management’s recommendation in making its determination.

5. Board Determination Proposal is Not Qualified. If the Board determines that the proposal is not thus qualified, it shall be summarily rejected by the Board. The Interested Party shall have no opportunity to correct or re-submit a proposal that has been rejected by the Board as unqualified. Any subsequent proposal submitted by an Interested Party within two (2) years following the Board’s rejection of the Interested Party’s initial proposal pursuant to this process shall not be considered by the Cooperative, and shall be summarily rejected.

6. Initiation of Phase I and Phase II Evaluations. If the proposal is thus determined to be a Qualified Offer, and the administrative cost reserve provided for inPart II.3(k) is properly deposited under a form of agreement approved by the Board, the Board shall promptly institute the following procedures as Phase I and Phase II of an evaluation process:

17.B.1

Packet Pg. 245

a. Commencement of Evaluation. Management shall undertake anevaluation of the Qualified Offer. The evaluation shall take into account the provisions of this Policy, including the Standards for Evaluation set out in Part III. Management may retain such consultants, advisors, and outside counsel as it deems appropriate in connection with its evaluation.

b. Communications Liaison. Management shall designate one or more individuals from the Cooperative to receive all communications, including telephone calls and written communications, from the Interested Party, the members, and the media. The designated individual[s] shall understand and follow this Policy, but not have authority to bind the Board or the Cooperative on any matter regarding the Qualified Offer. The Interested Party shall not communicate or discuss the proposal with any Member of the Cooperative other than the designated individual[s].

c. Qualified Offer Copies to Counsel/Loan Effect Inquiries. Management shall send a copy of the Qualified Offer to the Cooperative’s attorney and such other attorneys and advisors as appropriate; and it shall determine through appropriate inquiries the effects of the Qualified Offer upon the Cooperative’s mortgage, loan, or bond documents, or other instruments relating to the Cooperative’s outstanding debt.

d. Rate and Service Quality Comparisons. Management shall obtain a comparison of the Cooperative’s and the Interested Party’s present (if the Interested Party is presently engaged in the provision of electric services) and reasonably foreseeable future rates, fees and charges, assuming the future operation of the Cooperative by the Interested Party, including service extension requirements, other service rules and regulations, adequacy and reliability of service and any other considerations relevant to the provision of electric service.

e. Information From Interested Party. Management shall request detailed information from the Interested Party, such as annual reports, tax returns, and form 10-K filings dating back at least five (5) years; full copies of all relevant audits, internal planning documents, employee policy manuals; a current stockholder or proposed investor list; a list of all pending court and administrative proceedings relevant to the proposed transaction; and any relevant operations manuals, engineering studies, construction plans, and environmental impact statements.

f. Tax Impact Opinion. Management shall request the Interested Party to submit an expert opinion, from such experts acceptable to the Cooperative, setting forth the potential tax liabilities of the transaction to the Cooperative and the members.

g. Phase I Evaluation/Recommendation. If, after Management’s preliminary investigation, which shall be reported to the Board with Management’s recommendation, the Board determines that, based on the findings to date, the Qualified Offer warrants proceeding with the expense of further

17.B.1

Packet Pg. 246

investigation in greater depth, the Board shall authorize Management to implement a second phase of the investigation.

h. Phase II Evaluation. If the Board has determined that the Qualified Offer justifies further investigation in greater depth, Phase II of the investigation shall be conducted by Management with the following features, and with the assistance of such consultants, advisors, and outside counsel as Management deems appropriate in connection with its evaluation:

(1) Investment Cost Reserve Addition. As a condition of this second phase, the Interested Party shall be required to deposit an additional sum of not less than $750,000 into the administrative cost reserve. The additional deposit amount may be increased if the Directors determine that the Cooperative’s evaluation efforts so require, and the Interested Party shall deposit the additional sum so required.

(2) Cooperative Information. If requested, the Cooperative shall provide additional information to the Interested Party regarding the Cooperative’s finances and operations, subject to the Interested Party’s execution of a confidentiality agreement in form acceptable to the Cooperative.

(3) Revised and Final Proposal. The Interested Party may thereafter submit a revised and final proposal to the Cooperative, reflecting the complete and definitive terms and conditions associated with the proposed transaction that is contemplated by the Qualified Offer.

(4) Valuation Study. In evaluating the Interested Party’s proposal or final proposal (if a revised final proposal is submitted) Management shall obtain reports by two or more independent persons or firms (“valuers”) expert in such matters, utilizing commonly accepted valuation methods, who shall be appointed by the Board and who shall render their respective opinions and findings as to valuation matters specified by Management, which matters may include the following:

(i) the value of the Cooperative’s physical properties and assets,

(ii) the value of its Property interests (including intangible interests such as, for instance, its service area rights),

(iii) the competitive going concern business value of the Cooperative, taking into account the present and reasonably foreseeable future market for its electric services,

17.B.1

Packet Pg. 247

(iv) the value of new and expanded residential, industrial, commercial and other-type growth that may be reasonably anticipated within the Cooperative’s service areas in the immediate and reasonably foreseeable future,

(v) a comparison of the Cooperative’s and the Interested Party’s present (if the Interested Party is presently engaged in providing electric service) and reasonably foreseeable future adequacy and reliability of service, rates, fees and charges, service rules, regulations and other terms and conditions of service, and

(vi) all other considerations meaningfully bearing upon the ability, willingness, intent, and expected effects of the respective parties in providing electric service. Such reports shall be limited to that portion of the Cooperative’s Property which is the subject of the Qualified Offer, if such offer applies to less than all or substantially all the Cooperative’s Property . Such valuers may also be assigned the responsibility of rendering their opinions as to the value of the loss to the Cooperative’s consumers of a cooperative, mutual benefit organization for providing their electric services on a nonprofit, area-coverage basis at the lowestcost consistent with sound business principles, as opposed to receiving such service from a for-profit investor-owned utility, and as to the effect on the value and continued operations of the Cooperative’s remaining systems, if any. However, Management shall also study the foregoing value factors and report its conclusions to the Board and the Board shall make its own final determination thereof, with the assistance of recommendations made by Management. The Board will give good-faith regard to the reports and opinions of such valuers on all matters covered by their reports and opinions, reserving the right, however, to reject or accept such aspects thereof as the Board, after due consideration, may in its own sole discretion and judgment so determine.

i. Other Phase II Measures. Taking into consideration the provisions of this Policy and the Standards for Evaluation set out in Part III, the Board shall also undertake such other consultations, studies, deliberations and other measures and engage such advisors as it deems appropriate and sufficient to enable it to inform itself of all matters that are relevant and material to its decision as to whether to approve and recommend or to reject the Qualified Offer.

7. Notice on Rejection. If the Board rejects the Qualified Offer, it shall promptly so notify the Interested Party.

8. Option for Solicitation Process. If at any point in its evaluation process

17.B.1

Packet Pg. 248

the Board determines that an expanded process for soliciting proposals from other potentially qualified entities is desirable and in the best interests of the Cooperative and its members, upon a vote of two-thirds of the Directors, such a process may be implemented in lieu of continuing with the procedures set out in this Policy. In such event, the Interested Party will be so informed in writing and any remaining balance in the administrative cost reserve fund shall be paid, without interest, to the Interested Party.

9. Board Approval of Qualified Offer. If, after evaluation and mutual agreement by the Board and the Interested Party to any changes in the Interested Party’s proposed definitive agreement, two-thirds (2/3) of the Directors comprising the Board determine by affirmative vote that the sale, lease, merger, or other acquisition proposed by the Qualified Offer is in the best interest of the Cooperative and its members under the terms of such definitive agreement, the Board shall:

a. formalize such determination by adopting a resolution consistent with the provisions of the Bylaws, and notify the Interested Party of the Cooperative’s intent to further pursue the proposed transaction contemplated by the definitive agreement (“Approved Definitive Agreement”), subject to the necessary approval thereof by the Cooperative’s members and any other required approvals; and subject to agreement by the Interested Party to the following terms and conditions, to be included in the Approved Definitive Agreement:

(1) that the Cooperative is released from or otherwise satisfies its wholesale power contracts;

(2) that any adverse tax impacts upon the Cooperative as an entity and its present and former members will be minimized to the extent practicable;

(3) that all existing employees of the Cooperative are offered continued employment for at least three (3) years upon terms at least equal to those enjoyed by the Cooperative’s employees at the time the Qualified Offer was submitted to the Board with the employment terms to be considered to include wages, salaries, severance benefits, insurance and pension benefits, fringe benefits, rank and job title, place of employment, and residence;

(4) that the total consideration to be paid by the Interested Party will be paid directly to the Cooperative or its account; provided that a Qualified Offer of merger may provide for issuance of stock to the Cooperative’s members in exchange for their capital credits and membership interests;

(5) that the transaction will become void if all regulatory and contractual approvals are not obtained within a reasonable time after member approval;

17.B.1

Packet Pg. 249

(6) that earnest money in an amount reasonably determined by majority vote of the Board be deposited by the Interested Party with the financial institution referenced in Part II.3(k) of this Policy to ensure the continued good faith commitment of the Interested Party to proceed to consummation of the proposed transaction, under terms determined by the Board; to satisfy this requirement, the Board may designate any remaining portion of the administrative reserve fund not needed for defrayal of evaluation costs to be utilized for such escrow, together with any additional amounts deemed appropriate.

(7) that the members will be notified of the Approved Definitive Agreement and of its substantive features;

(8) that there will be a call of a meeting of the members for the purpose of acting on the proposed transaction contemplated by the Approved Definitive Agreement, consistent with Part II.10 below; and

(9) any other terms and conditions reasonably determined by the Board to be necessary or appropriate in implementing the transaction contemplated by the Qualified Offer for inclusion in the Approved Definitive Agreement.

b. notify the National Rural Utilities Cooperative Finance Corporation (“CFC”) and/or any other applicable lenders of the Cooperative, to the extent such lenders have not already been notified, of the terms of the Approved Definitive Agreement and of the results of the Board’s evaluation process;

c. upon execution by the Interested Party of the Approved Definitive Agreement incorporating the foregoing elements, notify the members that a proposal has been received constituting a Qualified Offer and that has been determined by the Board after the two-phase evaluation process to warrant submittal to the members for their review and determination. The notification shall contain an accurate summary description of the Qualified Offer and of the Approved Definitive Agreement, shall state that the Board has provisionally approved the Approved Definitive Agreement for submittal to the members based on the evaluation process required by this Policy, shall briefly describe the procedures that the Board has followed in evaluating the Qualified Offer and the results of such evaluation, shall provide the name of the person members may contact with questions regarding the Qualified Offer and the evaluation process, and shall apprise the members that a copy of the formal Qualified Offer, relevant materials relating to the evaluation, and the Approved Definitive Agreement may be reviewed or copied by them at the Cooperative’s principal office and area offices at any reasonable hour during normal business days.

10. Procedure for Member Meeting. The conduct of the member meeting

17.B.1

Packet Pg. 250

and related mail balloting on the Approved Definitive Agreement shall be so undertaken as to minimize the financial cost and operational disruption of the conduct of the Cooperative’s business, consistent with the following:

a. The Board shall promptly fix the time, date and place of the meeting and shall prescribe the wording and method of disseminating, collecting and counting the written ballots to be employed in the voting. In fixing the date of the meeting, the Board shall have due regard for the ability of the members to become fully apprised of the Approved Definitive Agreement so as to enable them to make an informed decision through their votes submitted in connection with the meeting, which shall in any event be called and held in compliance with the Cooperative’s applicable Bylaw provisions.

b. If the Board determines that false or incorrect information is being disseminated by one or more persons, whether in favor of or opposed to the proposed transaction, and that such information may materially affect the outcome of the meeting and election, the Board may abort or withdraw the call of the meeting. Thereafter, the Board may either rescind its determination to approve the Approved Definitive Agreement, if it determines that the Interested Party was responsible, in whole or in substantial part, for the dissemination of such false or incorrect information; or it may reschedule the meeting and voting, conditioned upon the correction of such false or incorrect information by the person(s) responsible and upon their agreement to pay the cost of publishing such corrections in a manner prescribed by the Board, and/or upon their agreement to refrain from disseminating false or incorrect information relative to such newly fixed meeting and voting; and/or the Board may take any other action it deems appropriate in the circumstances.

c. The Board shall otherwise conduct the meeting and the voting, and count and announce the result of the votes cast, in accordance with such plans and procedures as it shall establish in a manner consistent with any applicable provisions of law or of the Cooperative’s Articles of Incorporation or Bylaws.

11. Conditions Applicable on Rejection of Qualified Offer or Approved Definitive Agreement. If the Qualified Offer is rejected, either initially by the Board or by the members in connection with their consideration of the Approved Definitive Agreement, any further proposal from the Interested Party submitting such Qualified Offer within (3) three years thereafter shall be summarily rejected by the Board unless it materially differs from the rejected Qualified Offer and Approved Definitive Agreement.

12. Approval of Approved Definitive Agreement. If the members vote to approve the Approved Definitive Agreement, the Cooperative shall take all actions reasonably necessary to effect the transaction contemplated thereby and, ifnecessary, dissolve and wind up the business of the Cooperative; provided, however, that it shall be the responsibility of the Interested Party to obtain all necessary

17.B.1

Packet Pg. 251

regulatory and contractual approvals. Unless such approvals are obtained within such reasonable time as determined by the Board, the proposed transaction shall be deemed terminated and null and void.

III. STANDARDS FOR EVALUATION BY BOARD

After having received and approved the status of a Qualified Offer under Part II.4, in evaluating and acting on a Qualified Offer under Phases I and II of the evaluation process set out in this Policy, the following criteria, as well as any other criteria which the Board may determine to be appropriate under the circumstances, will be taken into account by the Board:

1. Members’ Best Interest. Whether the Qualified Offer is in the best interest of the Cooperative’s members. In determining whether the Qualified Offer is in the members’ best interest, the Board will consider both economic and non-economic matters, both at the present time and for the reasonably foreseeable future.

2. Electric Service Quality. If the Interested Party is engaged in the provision of electric service, the reliability and character of the electric service provided by the Interested Party, at the time of the Qualified Offer and as projected into the reasonably foreseeable future, including timeliness and priority of service restoration after outages, and regard for good engineering and operating standards, as compared with the Cooperative.

3. Consumer Service Quality. If the Interested Party is engaged in the provision of electric service, the character and quality of consumer services provided by the Interested Party as compared with the Cooperative’s, including convenience for consumers of billing and bill-paying procedures, consideration and provision for consumers with special electrical needs or in hardship cases, procedures and personnel available for dealing with consumer complaints, extension/connection/ and reconnection policy with respect to new and existing consumers, concern for property owners and occupants in obtaining rights of way and constructing and maintaining facilities, and courtesy and personal regard in all official relationships with consumers and service applicants.

4. Personnel Effects. Effects on the Cooperative’s existing personnel, with respect to job security and advancement potential in a new organization, level of wages, salaries and fringe benefits, relocation policies, and other applicable policies.

5. Electric Rate Effects. Effects of the proposed transaction contemplated by the Qualified Offer on electric rates and other fees and charges of the Interested Party, compared with the Cooperative’s, looking both at the inception and at the indefinite future (but for a minimum of five years), and also taking into account the value of the Cooperative’s capital credit structure. In addition, the Board may consider how the members’ rates may be impacted in the future by the proposed transaction and the effect of the proposed transaction on the Cooperative’s regulatory status.

6. Community Relationship Effects. Effects of the proposed transaction

17.B.1

Packet Pg. 252

contemplated by the Qualified Offer on existing relationships of the Cooperative with the communities which it serves or which are adjacent to its service area, and their various civic, educational, business, and other community organizations.

7. Asset Value Comparison. Whether the expected value and profitability of the Cooperative’s Property to the Interested Party, after taking into account, among other relevant factors, the Cooperative’s financial forecasts, are of greater future value to the Cooperative’s members through continued or improved Cooperative operations.

8. Business Organization Comparison. How the Qualified Offer and its expected consequences, if with an investor-owned utility, a municipal utility, or a financial investor, compare with a possible merger or consolidation with one or more other cooperatives.

9. Contract Relations Effects. Effects of the proposed transaction contemplated by the Qualified Offer on present contractual relations of the Cooperative with its wholesale power suppliers, industry associations, CFC and other lenders, and other entities with which the Cooperative has existing executory contracts.

10. Assessment of Total Consideration. Whether the proposal clearly states the total consideration to be paid by the Interested Party and its manner of payment, and makes provision for the discharge of the Cooperative’s liabilities and the retirement and distribution of any surplus consistent with outstanding capital credit accounts, all in accordance with applicable law and the Cooperative’s Articles of Incorporation and Bylaws.

11. Capital Credit Retirement Evaluation. The extent to which the proposed transaction would result in a maximization of value of members’ equity interests in the Cooperative, including the value of and any premium to the value of members’ patronage capital accounts upon retirement, taking into account all relevant considerations relating to the future service of the Cooperative’s end users.

12. Effects of Partial Purchase. Effects on any of the foregoing criteria of a Qualified Offer to purchase Property used by the Cooperative to serve only a portion of its service area and distribution facilities, with respect to the resulting effects on the remaining portions of the Cooperative’s system.

13. Results of Valuation Assessments. The results of the reports concerning the value of the Cooperative. Although the Board shall consider all such information and opinions, it shall have the final responsibility to make the Cooperative’s official determination of value and whether acceptance of the Qualified Offer is in the best interests of the Cooperative and should be presented to the members for approval.

14. Compliance with Laws. Whether the Qualified Offer complies with all applicable laws, regulations, and requirements of the Cooperative’s Articles of Incorporation, Bylaws, and policies, and with all requirements of any of the

17.B.1

Packet Pg. 253

Cooperative’s mortgage, loan, or bond documents.

15. Financial Capability. Whether the Interested Party is financially able to consummate the Qualified Offer. The Board may also consider the source and feasibility of the proposed financing.

16. Solicitation of Other Proposals. Whether the Cooperative should seek other potential bidders for the Cooperative in order to maximize the value of the Cooperative for its members.

17. Environmental Factors. Whether operation of the Cooperative’s facilities and service to its end-users is likely to be conducted by the Interested Party with continuation or enhancement of the Cooperative’s present progressive policies relating to environmental protection, increased use of renewable energy sources and technologies, and energy efficiency, as evidenced by past practice of the Interested Party or credible current commitments.

18. Other Standards. Other standards determined by the Board to be relevant to reasonable assessment of any such Qualified Offer in light of its anticipated effects on the Cooperative’s system and the Cooperative and its members.

The Board, acting in good faith after informing itself of all relevant information and data and after implementation of relevant provisions of this Policy, will decide whether to reject a Qualified Offer or approve and recommend a Qualified Offer in the form of an Approved Definitive Agreement to the members for approval, based upon its determination of what is in the best interests of the Cooperative and its members.

RESPONSIBILITY:

It shall be the responsibility of the Board to implement the provisions of this Policy.

APPROVED , 2010

EFFECTIVE , 2010

CERTIFICATION OF SECRETARY

I , , do hereby certify that the above Policy was adopted by the Board of Directors on , 2010.

_______________________________Secretary

17.B.1

Packet Pg. 254



Sponsors: District 6 Director/President Larry Landaker


Updated: 7/14/2010 2:31 PM by Aisha Hagen Page 1

Subject: Establishment of Board Special Policy Committees




• Charter of Governance Bylaws and Legal Comm. 07_13_10 (PDF)

• Resolution to Establish a Compensation Committee of the Board (PDF)

18.A

Packet Pg. 255


July 19, 2010


Reestablishment of Board Special Policy Committees

WHEREAS, the Board of Directors of Pedernales Electric Cooperative, Inc., had previously created the following special policy committees at its July 20, 2009 Board meeting: (1) Financial Strategies, Contracts and Budget Committee, (2) Energy Conservation and Renewable Generation Programs Committee, and (3) Governance, Bylaws and Legal Committee; and

WHEREAS, the policy of the Board provides that special policy committees and their charters expire at the conclusion of the task(s) specified when created or upon seating of a new board, whichever comes first; and

WHEREAS, the members of the Cooperative have elected new members of the Board at the Cooperative's Annual Meeting on June 19, 2010; and

WHEREAS, the Board created at its March 15, 2010 meeting a Compensation Committee as described in the attached Resolution; and

NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of Pedernales Electric Cooperative, Inc. appoint, designate and reestablish those special policy committees of the Board as described in the attached charters.

18.A

Packet Pg. 256

EXHIBIT B Charter of the Governance, Bylaws and Legal Committee

of the Board of Directors of Pedernales Electric Cooperative, Inc.

Adopted by the Committee September 8,2009

Purpose of the Governance, Bvlaws and Leoal Committee

The purpose of the Governance, Bylaws and Legal Committee of the Pedernales Electric Cooperative, Inc. (the Cooperative) shall be to help ensure that systems and processes are in place to ensure proper accountability and openness in the conduct of Cooperative business.

Duties and Responsibilities of the Govemance. Bvlaws and Legal Committee

The duties and responsibilities of the Govemance, Bylaws and Legal Committee shall be:

1 . To serve as the preferred mechanism through which all initiati\les that need to be codified in the Bylaws flow; and,

2. To initiate a study of strategies that involve ethics, legal issues and matters pertaining to state and federal legislation and regulatory issues; and,

3. To provide recommendations to the Board regarding the election of directors and for election procedures; and,

4. To review codes of ethics for executives, employees and directors; and,

i / 5. To perform any and all such other duties as may be assigned to the

e committee by the Board from time-to-time.

Scope of Authority of the Governance. Bvlaws and Legal Committee

The Governance, Bylaws and Legal Committee is advisory, and shall have no authority to act on behalf of the Board or the Cooperative except in matters where that authority has been expressly delegated to the committee by Board approval of this charter, or by Board vote in a meeting conducted in compliance with the Cooperative Open Meetings Policy.

Tire Governance, Bylaws and Legal Conznlittee may meet in open session, set public hearings and accept testimony, and set executive sessions in compliance witlr the Cooperative Open Meetings Policjl.

Governing Laws and Policy

The Governance, Bylaws and Legal Committee will be governed in all respects by state and federal law, the Cooperative Articles of Incorporation, the Cooperative Bylaws, and the Committee Guidelines initially adopted by Cooperative Board of Directors on July 20, 2009, incorporated by reference herein, and any subsequent clarifications of modifications of those Guidelines passed by the Board.

18.A.1

Packet Pg. 257

Att

ach

men

t: C

har

ter

of

Go

vern

ance

Byl

aws

and

Leg

al C

om

m. 0

7_13

_10

(12

87 :

Est

ablis

hm

ent

of

Bo

ard

Sp

ecia

l Po

licy

Co

mm

itte

es)

EXHIBIT D CHARTER OF TI-IE ENERGY CONSERVATION AND RENEWABLE GENERATION PROGRAMS COMMITTEE OF THE BOARD 01; DIRECTORS OF PEDERNALES

ELECTRIC COOPERATIVE, INC. ADOPTED BY THE COMMITTEE SEPTEMBER 11,2009

Purpose of the Enerw Conservation and Renewable Generation Programs ~ ' o m m i t t e e

The purpose of the Energy Conservation and Renewable Generation Programs Committee of the Pedemales Electric Cooperative, Inc. (the Cooperative) shall be to consider policies that address the goals for energy conservation and renewable energy and as part of the PEC power supply contracts.

Duties And Responsibilities of the Ener- Conservation and Renewable Generation Programs Committee

The Duties and responsibilities of the Energy Conservation and Renewable Generation Programs Committee shall be:

(a) to coordinate its work with the Financial Strategies, Contract and Budget Committee; and,

(b) to make recommendations to the board that address the goals for energy conservation and renewable energy and as part of the PEC power supply contracts; and,

(c) to perform any and all such other duties as may be assigned to the committee by the Board from time-to-time.

Scope Of Authoritv of the E n e r w Consenlation and Renewable' Generation Programs Committee

The Energy Conservation and Renewable Generation Programs Committee is advisory, and have shall have no authority to act on behalf of the Board or the Cooperative except in matters where that authority has been expressly delegated to the committee by Board approval of this charter, or by Board vote in a meeting conducted in compliance with the Cooperative Open Meetings Policy.

Governing Laws and Policv

The Energy Conservation and Renewable Generation Programs Committee will be governed in all respects by state and federal law, the Cooperative Articles of Incorporation, the Cooperative Bylaws, and the Committee Guidelines initially adopted by Cooperative Board of Directors on July 20,2009, incorporated by reference herein, and any subsequent clarifications or modifications of those Guidelines passed by the Board.

18.A.1

Packet Pg. 258

Att

ach

men

t: C

har

ter

of

Go

vern

ance

Byl

aws

and

Leg

al C

om

m. 0

7_13

_10

(12

87 :

Est

ablis

hm

ent

of

Bo

ard

Sp

ecia

l Po

licy

Co

mm

itte

es)

CHARTER OF THE FINANCIAL STRATEGIES, CONTRACTS AND BUDGET COMMITTEE OF TEIE BOARD OF DIRECTORS OF PEDERNALES ELECTRIC

COOPERATIVE, INC. COMMITTEE ADOPTED AUGUST 25,2009 W I B i T E BOARD APPROVED SEPTEMBER 21,2009

Purpose of the Financial Strategies, Contracts and Budget Committee

The purpose of the Financial Strategies, Contracts and Budget Committee (the Committee) of the Pedernales Electric Cooperative, Inc. (the Cooperative) shall be to ensure all financial matters and strategies for contracts, budgets, capital credits, and

capital and cash management strategies are in the best financial interests of the Cooperative's members.

Duties And Responsibilities of the Financial Strategies, Contracts and Budget Committee

The duties and responsibilities of the Committee shall be to recommend financial goals and objectives to achieve sound financial management, incorporating cost efficiency and management accountability in these areas:

(a) Formulation of an explicit strategy and policy for capital credits; (b) Working with Cooperative management to develop: I ) operating budgets, 2)

long-term capital improvement plans, 3) all real-estate matters; (c) All issues relating to power supply contracts and those contracts for products

or services requiring board approval perform: (d) Oversight of General Manager's contract; (e) Make recommendations to the Board on all financial matters considered

andlor requiring full board approval; (0 Performance of any and all such other duties as may be assigned to the

committee by the Board from time-to-time.

Scope Of Authoritv of the Financial Strategies, Contracts and B u d ~ e t Committee

The Committee is advisory, and shall have no authority to act on behalf of the Board or the Cooperative except in matters where that authority has been expressly delegated to the Committee by Board approval.

Governin? Laws and Policv

The Committee will be governed in all respects by state and federal law, the Cooperative Articles of Incorporation, the Cooperative Bylaws, and the Committee Guidelines initially adopted by Cooperative Board of Directors on July 20, 2009, incorporated by reference herein, and any subsequent clarifications or modifications of those Guidelines passed by the Board.

18.A.1

Packet Pg. 259

Att

ach

men

t: C

har

ter

of

Go

vern

ance

Byl

aws

and

Leg

al C

om

m. 0

7_13

_10

(12

87 :

Est

ablis

hm

ent

of

Bo

ard

Sp

ecia

l Po

licy

Co

mm

itte

es)

Pedernales Electric Cooperative, Inc.Regular MeetingMarch 15, 2010

RESOLUTION 2010-20

Resolution to Establish a Compensation Committee of the Board

WHEREAS, it is a proper function of the Board to review and approve appropriate and supportable compensation and benefits programs that are in the Cooperative's and members' best interests and aligned with the Cooperative's business mission andstrategy: the terms of compensation for PEC directors, executives, and staff; and

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE that a Compensation Committee is created with the followingmembers: the Board President; the Chair of the Financial Strategies, Contracts & Budget Committee, and the Chair of the Governance, Bylaws, and Legal Committee. The Compensation Committee shall select its chair by a vote of the committee members. comprising of the Chairman of the Audit Committee, the Chairman of the Financial Strategies, Contracts and Budget Committee, and the Chairman of the Governance, Bylaws and Legal Committee.

The committee shall be a special committee, which shall go out of existence when the Board resolves that the committee has they have completed the work for which it was created and the committee should be dissolved. their specific tasks.

The purposes of the committee shall be: to consider and make recommendations to the Board concerning the overall compensation philosophy and programs of the Cooperative; to review and recommend to the Board appropriate compensation and benefits for Cooperative Directors and executives; and to perform any other tasks or duties the Board may assign. on all matters concerning PEC compensation,compensation policy or any other compensation plan.

RESULT: ADOPTED AS AMENDED [UNANIMOUS]



AYES: Landaker, Clement, Scanlon, Cox, Felps, Harmon, Williams

16.B.1

Packet Pg. 41

3.A

Packet Pg. 48

Min

ute

s A

ccep

tan

ce:

Min

ute

s o

f M

ar 1

5, 2

010

10:0

0 A

M (

Min

ute

s A

pp

rova

l)

18.A.2

Packet Pg. 260

Att

ach

men

t: R

eso

luti

on

to

Est

ablis

h a

Co

mp

ensa

tio

n C

om

mit

tee

of

the

Bo

ard

(12

87 :

Est

ablis

hm

ent

of

Bo

ard

Sp

ecia

l Po

licy

Co

mm

itte

es)






Subject: Establishment of Executive Search Committee



Background:

18.B

Packet Pg. 261


July 19, 2010


Establishment of Additional Board Special Policy Committee -Executive Search Committee

WHEREAS, the Board of Directors of Pedernales Electric Cooperative, Inc., had previously created three special policy committees of the Cooperative at its July 20, 2009 Board meeting; and

WHEREAS, the Board created a Compensation Committee as a special committee at its March 15, 2010 meeting; and

WHEREAS, the Board wishes to now establish an Executive Search Committee to assist in the hiring of a General Manager for the Cooperative; and

WHEREAS, the Executive Search Committee shall be a special policy committee, which shall expire at the conclusion of the task(s) specified.

NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of Pedernales Electric Cooperative, Inc. appoint, designate and establish the Executive Search Committee of the Cooperative.

18.B

Packet Pg. 262






Subject: Election of Board Committee Chairs



Background:

18.C

Packet Pg. 263


July 19, 2010


Appointment of Board Committee Chairperson and Members

BE IT RESOLVED that the Board of Directors of Pedernales Electric Cooperative, Inc. hereby appoint and designate the directors to serve as chairpersons and members of the established board committees as presented.

18.C

Packet Pg. 264



Sponsors:



Subject: TEC Voting Delegates




• TEC Voting Delegate 2010-2011 001 (PDF)

18.D

Packet Pg. 265


July 19, 2010


Appointment of TEC Voting Delegates

RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the following Directors are hereby appointed and designated as authorized representatives of the Cooperative to serve as a voting delegate and alternate delegate to act at meetings of the Texas Electric Cooperative, including the 70th TEC Annual Meeting and any Special TEC Membership Meetings occurring between August 3, 2010 through August 8, 2011, until successors are duly appointed and designated: ____________, Voting Delegate; __________, Alternate Delegate.

18.D

Packet Pg. 266

18.D.1

Packet Pg. 267

Att

ach

men

t: T

EC

Vo

tin

g D

eleg

ate

2010

-201

1 00

1 (

1259

: T

EC

Vo

tin

g D

eleg

ates

)



Sponsors:



Subject: 2010 NRECA Regional Meeting Voting Delegate

Submitted By: Sylvia Romero



• NRECA 2010 Regional Meeting Voting Delegate Certification (PDF)

18.E

Packet Pg. 268


July 19, 2010


Appointment of 2010 NRECA Regional Meeting Voting Delegate

RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the following Directors are hereby appointed and designated as authorized representatives of the Cooperative to serve as a voting delegate and alternate delegate to act at meetings of the 2010 National Rural Electric Cooperative Association Regional Meeting until successors are duly appointed and designated: ______________________, Voting Delegate; and _____________________, Alternate Delegate.

18.E

Packet Pg. 269

I NRECA 20 1 0 Regional Meeting

Printed below in the NRECA VOTING DELEGATE CERTIFICATION box are the Voting Delegate and Alternate

Delegate who are presently on file at NRECA for your member system. Please review, correct and certify this information in order to vote at the Business Session for the 2010 Regional Meeting. Please Fax this form to

NRECA at (703) 907-5951 .

National Rural Electric Cooperative Association

A T w h s r m Energv' Cmperaove 6th -

TO: Juan Garza Pedernales Electric Co-op, Inc. PO Box 1 Johnson City, TX 78636-0001

Voting Delegate Certification a n d Credentialing Process

Region 10 Texas

Meeting and Delegate Registration Procedures

N R E C A 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 meetings of the Association. All voting delegates must submit certification

signed by the president and secretary of the member that such delegate i s duly authorized to cast the vote of the member."

Please review the information below and make any necessary corrections or changes. 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. If there are no changes, check the "No Change

n box for the delegate and/or alternate delegate. If new

delegates have been selected, please provide the new information requested. This form must be dated, signed by the president and secretary of the member system, and returned to the NRECA office. Regions 1 , 4, 5, 6, and 9 are due by

Avgust 3,2010. Regions 2, 3, 7, 8 and 10 are due by September 1,2010.

The following are hereby certified as official voting delegate and alternate and are duly authorized to cast the vote of this member.

@ Please fax signed, dated and completed form to 0 At the NRECA Voting Delegate Registration Desk, the delegate's NRECA at (703) 907-5951 by August 3,2010 for Certification information will be reviewed and the delegate will receive Regions l , 4 , 5, 6 and 9 and by September 1, 2010 the official delegate ribban (that should be attached to the name badge) For Regions 2, 3, 7, 8 and 10. and the assigned voting credential for the meeting.

Current Voting Delegate Larry Landaker, CCD 0 No Change

@ Delegates must be registered for the meeting (either in @ The delegate must bring his/her voting credential to the NRECA Business Session odvonce or onsite) and receive a badge before they can and present it in order to vote. Each voting member i s permitted one vote on each obtoin their voting credentials. of the resolutions and other business properly brought before the Annual and

Regional Meeting Business Session. No individual may represent more than one @ After registering, the delegate must then proceed to the NRECA Voting Delegate Desk that will be located near

voting member system and proxy voting i s prohibited at all meetings.

the general meeting registration site.

Current A l t e r n a t e Delegate Cristi Clement, CCD 0 No Change

If you have any quesfions concerning the above procedure, please contact the Membership Department at (703) 907-5868.

New Voting Delegate: Title

New Alternate Delegate: Tide

(The Alternate is certified to act only in the absence of the Delegate.)

Signed President (of member system) DATE Secretary (of member system) DATE

18.E.1

Packet Pg. 270

Att

ach

men

t: N

RE

CA

201

0 R

egio

nal

Mee

tin

g V

oti

ng

Del

egat

e C

erti

fica

tio

n (

1275

: 2

010

NR

EC

A R

egio

nal

Mee

tin

g V

oti

ng

Del

egat

e)

19.A.1.a

Packet Pg. 271

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)

19.A.1.a

Packet Pg. 272

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)

19.A.1.a

Packet Pg. 273

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)

19.A.1.a

Packet Pg. 274

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)

19.A.1.a

Packet Pg. 275

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)

19.A.1.a

Packet Pg. 276

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)

19.A.1.a

Packet Pg. 277

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)

19.A.1.a

Packet Pg. 278

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)

19.A.1.a

Packet Pg. 279

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)

19.A.1.a

Packet Pg. 280

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)

19.A.1.a

Packet Pg. 281

Att

ach

men

t: E

xecu

tive

Su

mm

ary

& P

ow

erP

oin

t G

rap

hs

7_19

_10

(12

73 :

Co

llect

ion

Pla

n U

pd

ate)






Subject: Appoint a Temporary Parliamentarian



Background:

19.B.1

Packet Pg. 282


July 19, 2010


Appointment of Parlimentarian to Serve at Board Meetings

WHEREAS, the Board of Directors of Pedernales Electric Cooperative, Inc., had previously appointed General Counsel Luis A. Garcia as temporary parliamentarian of the Cooperative at its July 20, 2009 Board meeting; and

WHEREAS, General Counsel Garcia is now serving as the Acting General Manager of the Cooperative and is no longer able to serve as parliamentarian; and

WHEREAS, the Board recognizes and Robert’s Rules acknowledges the advisability of designating a parliamentarian to advise the presiding officer on matters of procedure; and

NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of Pedernales Electric Cooperative, Inc. appoint such person serving from time to time in the capacity as General Counsel for the Cooperative to serve as parliamentarian at Board meetings.

19.B.1

Packet Pg. 283

Board of Directors · Report on Monthly Safety Performance ... Collection Plan Implementation 2....

Documents

Transcript of Board of Directors · Report on Monthly Safety Performance ... Collection Plan Implementation 2....