MINUTES OF THE
JEMEZ MOUNTAINS ELECTRIC COOPERATIVE, INC.
BOARD OF TRUSTEES
MEETING
FRIDAY, JULY 29, 2016
HERNANDEZ, NEW MEXICO
1.This Regular Meeting of the Jemez Mountains Electric Cooperative, Inc. Board of Trustees Meeting was called to order by Chairman Bruce Duran at approximately 9AMon the above-mentioned date, at the main office of the Cooperative, Hernandez, New Mexico.
2. & 3. Following the Pledge of Allegiance, Steve Santistevan, Secretary, called roll and confirmed the presence of a quorum with the following Trustees present:
PRESENT:EXCUSED:
Mr. Bruce Duran, ChairNone
Ms. Dolores McCoy, Vice Chair
Mr. Steven D. Santistevan, Secretary
Mr. Johnny Jaramillo, Treasurer
Mr. Lucas J. Cordova, Trustee
Mr. Nick Naranjo, Trustee
Mr. Richard Ramsey, Trustee
Mr. David D. Salazar, Trustee
Mr. Victor Salazar, Trustee
Mr. John Tapia, Trustee
Mr. Charlie Trujillo, Trustee
JMEC STAFF PRESENT:
Mr. Ricky Bejarano, Chief Financial Officer
Mr. Adam Roybal, Engineer
Mr. Eli Gallegos, Facilities Manager
Ms. Donna Trujillo, Account Manager
Ms. Carmen Campbell, Rate & Regulations Manager
OTHERS PRESENT:
Mr. Barron Jones, Rio Grande Sun
Ms. Phadra Haywood, The New Mexican
Mr. Robert Quintana, El Rancho
Mr. John Gutty, District 6
4.APPROVAL OF AGENDA
ACTION: Mr. Cordova moved approval of the agenda as published. Mr. Santistevan seconded and the motion passed by unanimous voice vote.
5.RECOGNITION OF GUESTS
Those present introduced themselves.
6.BUSINESS WITH MEMBER GUESTS
a. Information requests by members/outside parties
[See page 4]
7.ACTION ITEMS
a.Approval of Minutes: May 24, 2016 and June 27, 2016
[See page 7 for action on the July 17, 2016 meeting minutes]
ACTION: Mr. D. Salazar moved approval of the minutes cited above on the condition any corrections can be made in the future. Mr. Naranjo seconded and the motion passed by unanimous voice vote.
b.Approval of the June Membership List
There was a question regarding the district numbers and service area number.
ACTION: Mr. Naranjo moved approval of the June membership list. Mr. Santistevan seconded and the motion passed by unanimous voice vote.
c.Add CEO to the title of General Manager Joseph Sanchez
Mr. Bejarano said it is a standard industry practice that the general manager is referred to as the CEO (Chief Executive Officer).
ACTION: Mr. Naranjo moved to approve the addition of CEO to the General Manager’s title. Ms. McCoy seconded and the motion passed by unanimous voice vote.
8.GENERAL MANAGER’S UPDATE
Mr. Bejarano advised the Board that Manager/CEO Joseph Sanchez was attending a Tri-State meeting.
a.Board Book vs. Diligent Board software for Board information
Mr. Bejarano said that staff has been researching software which can be used for Board information update, and distribution of paperless board books. There have been access issues with the current Board Book software. Andrew Chavez developed a comparison of Board Book and Diligent Board that Mr. Bejarano reviewed, noting Diligent Board to be more powerful and more expensive. Diligent offers one-on-one training.
Mr. Cordova reminded the Board of their desire to reduce the paper they use. While Diligent is $4,500 more than Board Book annually, the price covers 15 people and one administrator, with extra users costing $500 per person. As a user of Diligent, Mr. Cordova said it is highly functional and should be considered by the Board.
Chair Duran said that with a goal of becoming paperless, having the most effective software makes sense.
Mr. Santistevan said his experience with Board Book has been good and without problems. If the issue is access, he suggested staff address that before purchasing new software. At this point, JMEC is not using all of the features offered by Board Book. He asked that the IT Committee be given an opportunity to review software,and develop a recommendation to the present the Board.
ACTION: Mr. Santistevan moved to defer this item to the IT Committee for its review. Mr. Naranjo seconded and the motion passed by unanimous voice vote.
DIRECTIVE: Staff to schedule an IT Committee meeting with Andrew Chavez and any other pertinent staff in attendance.
b.Business Services & Finance
1)June 2016 Financials
Mr. Bejarano said that with June’s high temperature weather the usage went up. The energy is used during June but not paid until July, which demonstrates the negative. Total kilowatt-hours sold were approximately 27 million. Revenues from electric sales were $3.7 million and the projection/budget was $3.794 million. In overall revenues there was a negative of 2.37 percent. He reviewed the graphs showing revenues and a comparison of Kinder Morgan’s 2015 and 2016 revenues, noting they are JMEC’s largest load. He said the July update will hold steady and make up revenue.
Mr. Bejaranosaid he was working on a way to present the energy use and revenue in an accrual manner, to better inform the Board of finances. Ms. Donna Trujillo, Account Manager, said this time of year there is always a negative margin which recovers in July. Ms. Trujillo is developing five year trending information to accurately map out the financials.
Mr. D. Salazar asked how shut-offs are dealt with when the customer pays after hours. Mr. Bejarano said that generally, service is not terminated after hours; however, service has been reinstated after 5 pm to accommodate a customer.
Mr. Santistevan recommended that a policy be developed to address service cut-off and reinstatement within the same day period.
Chair Duran asked whether a list was kept of critical need customers, using oxygen etc. Mr. Bejarano said that there is a certification kept on file, and JMEC is very careful with those customers. In fact, customers many times will ask for additional extensions claiming, someone is on oxygen and never produce a certificate, and those bills continue to escalate without certifications. He said the collection business is very tough, and he lauded the meter readers who work very hard not to cut off someone’s service.
Mr. Bejarano noted that as a $50 million annual enterprise, JMEC’s bad debt write offs are very low.
In regard to TIER and OTIER, Mr. Bejarano said there was a drop in TIER which was attributed to the surge in energy use in June. JMEC is within the requirements. JMEC’s equity is at 48 percent and anything over 40 percent is regarded as very good in this industry.
A question was raised concerning June 2015 and June 2016 comparison numbers for “admin & general expense per consumer statistics,”and Ms. Trujillo said that she was aware of it, and at this point attributed the reduction to good management but would conduct further investigation. Mr. Bejarano said that many times these discrepancies can be attributed to incorrect booking.
DIRECTIVE: Staff was asked to report back to Board on their findings regarding the “admin & general expense per consumer statistics.”
The cash flow statement does not reflect the transfer of $10 million to the cushion of credit account. However, there is approximately $12 million within that account which includes the second quarter payment to RUS, as well as the transfer of the $10 million.
6. b.Information requests by members/outside parties (cont.)
John Gutting said he talked to Manager Sanchez last week, and was present today to ask about the audit that was conducted following his review of Board expenses. Chair Duran said the audit has taken longer than anticipated. Mr. Bejarano confirmed this, stating that the auditors have requested additional information and are interviewing board and staff. He understood the report would be completed within the next few weeks.
Mr. Gutting asked how the results would be made public and Chair Duran anticipated a special meeting would be called. With Ms. Jaquez’s departure, Mr. Gutting said the postings of agendas, minutes, etc. have not taken place.
8.b.2.Finance Committee Meeting
Johnny Jaramillo, Chair of the Finance Committee, reported that the committee met with a quorum on July 28th.
a.General Fund Expenditure
ACTION: Mr. Jaramillo moved approval of the general fund expenditures. Mr. Naranjo seconded and the motion passed without opposition.
b.Credit Cards
Mr. Jaramillo said the Finance Committee reviewed the charges/invoices to the credit cards (two) used by staff, and found them accurate and in order.He reviewed the charges made by Manager Sanchez, Ms. Jaquez, Mr. Nathan Duran and Ms. Erlinda Baca on the American Express Card.
Mr. Bejarano said that using the credit card(s) earns points and/or money back, which is good practice. The points will be used for travel regarding training. Staff is investigating Wells Fargo commercial credit cards because they offer cash back, which may be more advantageous for JMEC.
Regarding the purchase of parts, Mr. Bejarano said “open” purchase orders have been established with local vendors to expedite purchases.
DIRECTIVE: Staff to provide data on how the American Express points have been used.
Mr. Jaramillo reviewed the Wells Fargo account which was used by Ms. Jaquez.
Mr. Bejarano explained that Wells Fargo provides the cash back at the end of the year and JMEC books it as miscellaneous revenue.
ACTION: Mr. Jaramillo moved to approve the credit card charges. Mr. Tapia seconded and the motion passed by unanimous voice vote.
c.Attorney Expenses
Mr. Jaramillo said there was a charge from Wilson, Elser, Moskowitz, Edelman and Kicker, LLP in the amount of $1,991.
Mr. Bejarano said that this firm specializes in security breaches, and is utilized based on the insurance company’s direction. He noted that the breach has not resulted in any compromises. He said this item and other litigation items will be discussed in executive session.
ACTION: Mr. Jaramillo moved to approve the attorney expenses as listed. The motion was seconded by Ms. McCoy and passed by unanimous voice vote.
d.Consultant Expenses
Ms. Campbell said the $3,300 Prime Group charge relates to the rate rider reconciliation that was filed in May. The charges will be recovered in next year’s rate.
Bolinger, Segars & Moss ($1,361.25) are the firm working on the capital credits issue. Mr. Bejarano said this consultant has requested a study session period with the Board to discuss their findings.
ACTION: Mr. Jaramillo moved to approve theconsultant expenses. Ms. McCoy seconded and that motion passed without opposition.
e.Trustees’ Vouchers
Mr. Jaramillosaid the vouchers were reviewed during the Finance Committee. He said that he signed off on the expenditures and was prepared to introduce a motion for approval.
Chair Duran said the vouchers were not made available prior to this meeting and he requested additional time to pursue them. He said it is important that the requests are reviewed, and that all Board members are comfortable with what they are approving.
Mr. Santistevan said that in the past and per policy, the vouchers were approved by the Finance Committee Chair. He understood Mr. Jaramillo’s position that, following review of the vouchers by the Finance Committee and its Chair’s sign off, the Board would ratify that decision.
Mr. Jaramillo said that, until a new policy is adopted, he recommended the Board approve the Finance Committee’s recommendation. Mr. Naranjo added that not acting on the vouchers today will postpone action for an additional month.
ACTION: Mr. Jaramillo moved to the trustees’ vouchers as presented to the Finance Committee. His motion was seconded by Mr. Naranjo.
Action on the motion was postponed to allow further review of the vouchers. [See action below]
[The Board recessed from 10:25 – 10:35]
f.JMEC Account(s) Information
Mr. Bejarano said that as of June 30, 2016 there was $8.9 million in the general fund. The payroll account contained $6,389 million; RUS funding drawn in the spring is $11.6 million;and, the Cuba Wells Fargo sub-account has $2.9 million. The Jemez Valley Credit Union has $265,497.
Mr. Bejarano said the medical account, which contains $1,280, has not been closed.
g.Work Orders and OARS
Mr. Bejarano reported there were 291 open work orders at the end of June. Fifty-seven were closed during the month. The receivables balance at the end of June was approximately $442,664.04.
Adam Roybal reviewed the open work orders noting the districts and estimated cost for each. Some of the jobs that appeared on the work order list were outdated and needed to be closed out. He noted that there were some old projects that are being rolled into the new four-year plan. Research is required before the work orders can be closed out. Many of the projects in the Navajo Nation take years to complete with rights-of-way and funding issues.
h.Bids & RFPS
Mr. Roybal said an RFP was issued for pole inspection. This is an ongoing RUS requirement.
Sundance Power Pole Inspectors were the low bid and staff recommends awarding them the contract. He noted that they were awarded this contract last year and worked well with JMEC staff. A bid comparison was distributed for the Board’s review.
Sundance will visually inspect each pole and the wire in the spans between poles. Based on last year’s work, Sundance estimates 3 percent of the poles will require boring.
ACTION: Mr. Naranjo moved to accept the lowest bidder, Sundance, as presented by staff. His motion was seconded by Mr. Santistevan. The motion passed without opposition.
d.Trustees’ Vouchers(cont.)
Following the Board’s review, Mr. Jaramillo repeated his motion:
ACTION: Mr. Jaramillo moved to approve the trustees’ vouchers as presented to the Finance Committee. His motion was seconded by Mr. Santistevan and passed without opposition.
Mr. Jaramillo recommended that the vouchers be reviewed by Mr. Bejarano and no checks be issued until the Board approves payments.
i.Donations
Mr. Bejarano said two requests were received and no action is required. One was incomplete and the other was for an individual.
Mr. D. Salazar said the notion of creating a charity fund to help customers who require financial bill paying assistance came up at the May meeting. He mentioned that other co-ops have volunteer “round-up” programs where a customer rounds out their bill to the dollar and that change will be held in a special or round up fund to help assist customers. Mr. Naranjo supported the idea.
Chair Duran mentioned the Empty Stocking donation column found in the New Mexican and suggested JMEC could include a bill flyer seeking donations.
Mr. Bejarano said at this point JMEC’s charity foundation is limited to education.
DIRECTIVE: Management to consider how to implement a “round-up” type program.
9.BOARD REPORTS
A.Tri-State Report
B.Statewide (NMRECA) Report
No reports were offered.
10.NEW BUSINESS
None was presented.
11. EXECUTIVE SESSION
ACTION: Mr. Naranjo moved to go into Executive Session. Mr. Santistevan seconded and the motion passed by unanimous voice vote.
[The Board met in executive session from 11:10 – 12:20]
A motion and second was made to return to open session which passed without opposition.
ACTION: Mr. Cordova moved to approve the July 17, 2016 annual meeting minutes. His motion was seconded by Mr. Trujillo and passed by unanimous voice vote.
ACTION:Mr. Naranjo moved to approve Nancy Long with Long, Komer & Associates as JMEC’s general counsel. Mr. D. Salazar seconded and that motion passed by unanimous voice vote.
12. ADJOURN
Chair Duran declared this meeting adjourned at 12:25 p.m.
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Secretary
APPROVED:
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Chairman
JMEC Board of Trustees Meeting:07/29/2016Page 1