05/22/2012 Board Meeting

The board of directors held its regular meeting at the office of Tipmont REMC in Linden on May 22, 2012, beginning at 9:13am. All directors were present along with CEO Tim McCarthy.

President Bible introduced a resolution to loan money to Tipmont Holding Inc. to use for the HD Supply material distribution agreement. The resolution passed. Contracts will be reviewed in the June meeting.

CEO McCarthy discussed an E-business opportunity that would allow Tipmont members to access the online stores of HD Supply owned vendors to buy merchandise at a discount. The arrangement would also define a percentage of sales that would come back to Tipmont Holding Inc. While there is interest in pursuing, it will be tabled until the material supply contracts have been completed.

Allen Jones, GIS communication analyst, and Joe Kline, engineering / GIS supervisor entered the meeting and presented the GIS dashboard. This tool integrates information from the mapping system as well as outage and member information. The tool will be used to prioritize system work to further eliminate outages. It will be used extensively in the next work plan to aggressively target areas on the system that have multiple outages. In the long run, it will be a powerful aid in the effort to continue to improve on system reliability and will aid in lowering labor costs as these areas are targeted and less call outs are required.

Corey Willis, manager of information technology and communications, entered the meeting to discuss the changes in the phone system and server locations. Willis discussed the technical design. He explained how the new configuration of the servers and call routing in general reduces the risk of communications loss in the event of a system failure. Willis then showed the Board the impact the changes in the physical handling of member calls have had on payments made by our members. We are now seeing less than 5% of payments being taken by a member service representative. This helps drive down cost for our members as having a representative handle this simple transaction is the most expensive option for this work process. Willis explained those members that may struggle with online payments or over the phone payment options still have the ability to speak with a member service representative if they need to do so. He also explained that when we have a major event on the system, such as a wide spread storm, the new configuration now provides an unlimited number of phones lines for members to report outages. In the past, it was not uncommon in a large event for our members to receive busy signals as all phone lines were utilized.

Attorney Helmerick reported via email that he filed a proof of claim in the Omnicity bankruptcy in the United States Bankruptcy Court for the Southern District of Indiana in Indianapolis. This case continues to evolve and Attorney Helmerick and CEO McCarthy will monitor as it does so.

Debbie Morris, manager of finance and administration, entered the meeting and reported on the April financials. In the month of April the margin was $193,000. This brought the year-to-date margin to $1,033,000. This is $8,000 under budgeted margin. Revenue is under budget by $629,000 and controllable expenses are $346,000 under budget. There were 71 new services installed which brought our year-to-date total to 329. The cooperative currently has an equity rate of 52.13%

Morris mentioned she received a letter in the Alliance lawsuit over payment transfers. The results were disappointing. The cooperative received a very small amount owed and the suit is being dropped as the likelihood of recovery is far outweighed by the cost to pursue. In this case the cooperative was only able to recover $1,821 in payments and $1,899 in attorney fees. The cooperative will be forced to write off $17,200 and the case will be closed. Alliance has since filed for bankruptcy. All member payments are carried through First Data. No member accounts were impacted directly due to the result of Alliance’s transgressions.

Director Baker submitted his Wabash Valley Power Association (WVPA) report in writing. He advised the Board on the merger talks between WVPA and Hoosier Energy. Director Baker asked that this topic be placed on the June agenda for a more thorough Board discussion. He indicated he felt he needed more information on the risk involved in a merger of the two entities and wanted to bring the ACES report back to the Tipmont Board. Once the Tipmont Board members have this information a discussion will be held so Director Baker can take a vote to WVPA representing the whole Board’s opinion.

CEO McCarthy provided an update on the One Touch Share Purchase Agreement. Both McCarthy and CEO Randy Price of Carroll-White REMC met with the partners of MGW. An independent valuation of One Touch Security Plus, LLC will be performed and the share purchase agreement will be reviewed to make sure the interest of the members of both cooperatives continue to be protected through the life of the financial agreement. He also indicated he would be meeting with the program director for the Certified Production Technician Program at Ivy Tech. The discussion will center on what Tipmont can do to support the program and help communicate to members that may be looking for job skills training. Along with this, there may be an opportunity to work with other educational institutions to change the view of manufacturing jobs. This is warranted with the heavy emphasis on manufacturing in our service territory.

The Tipmont Board took the following other actions:

A. Approved revisions to Board Policy 604 – Energy Diversion and Unauthorized Restoration of Service
B. Reaffirmed Board Policy 726 – General Policy Statement
C. Approved revisions to Board Policy 732 – Substance Abuse