June 4, 2009
The regular meeting of the Board of Directors of the Omaha Public Power District was held in the Board Room on the Atrium Level of Energy Plaza East, on June 4, 2009, at 10:00 a.m.
Present were Directors N. P. Dodge Jr., J. K. Green, G. C. Hall, A. L. McGuire, J. R. Thompson, D. D. Weber and F. J. Ulrich. Director Cavanaugh was absent. Also present were W. G. Gates, President; M. C. Bodammer, Corporate Secretary; and S. M. Bruckner, General Counsel for the District. Mr. Ulrich, Board Chair, presided, and Mrs. Bodammer, Corporate Secretary, recorded the minutes. Other members of Management present were D. J. Bannister, T. J. Burke, E. E. Easterlin, A. J. Minks, D. F. Widoe, G. R. Williams, M. R. Jones, J. A. Martin, M. D. Purnell, D. Jacobberger, and S. W. Quaas. Others present included the two J. M. Harding Scholarship Award recipients, Song Q. Zheng and Troy D. Bailey (and his parents Doug and Jackie Bailey); Brinker Harding; a building trades union representative from Lincoln, Nebraska; and approximately five additional customer-owners and employees of the District.
The Corporate Secretary read the following:
“Notice of the time and place of this meeting was publicized by notifying the area news media; by publicizing same in the Omaha World-Herald and Outlets; by displaying such notice on the Arcade Level of Energy Plaza since May 29, 2009; and by mailing such notice to each of the District’s Directors on that same date.
“A copy of the proposed agenda for this meeting has been maintained, on a current basis, and is readily available for public inspection in the office of the District’s Corporate Secretary.
“Additionally, a copy of the Open Meetings Law is available for inspection in the public meeting book located in this meeting room.”
It was moved and seconded that the Board reviewed the April 2009 Comprehensive Financial and Operating Report and that the minutes and the excused absence of Director Weber for the last meeting be approved. The vote was recorded as follows: McGuire – Yes; Thompson – Yes; Weber – Abstain; Cavanaugh – Absent; Dodge – Yes; Green – Yes; Hall – Yes; and Ulrich - Yes. The motion carried.
Thereafter, the Corporate Secretary read the following:
“Persons wishing to address the Board on a particular item are asked to approach the microphone as that agenda item is discussed. Comments will be heard following Board discussion of the item and prior to a vote by the Board.”
The following resolutions were then read, and upon motion duly seconded, were placed on roll call. The vote on each resolution is indicated following the description of that resolution.
RESOLUTION NO. 5779 approves the appointment of an Investment Manager for the OPPD Retirement Plan. Director Dodge led the discussion stating that RogersCasey was utilized to initiate an extensive research effort for this new investment manager. He stated J. P. Morgan Investment Management, Inc. was selected after determining the firm exceeded all the Retirement Plan criteria and has performed in the top 25 percent of all US investment grade fixed income investment managers for the past three- and five-year periods. Following the discussion, the vote was recorded as follows: McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Absent; Weber – Yes; Green – Yes; Hall – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5780 approves the Engineer’s Certification and authorizes Management to procure two refurbishment kits from Flowserve Corporation to refurbish the reactor coolant pump mechanical seals at Fort Calhoun Station at a cost of $393,344. Following discussion, led by Director Green, the vote was recorded as follows: McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Absent; Weber – Yes; Green – Yes; Hall – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5781 approves and authorizes the implementation of the District’s updated Open Access Transmission Tariff and rates for Grandfathered Agreement customers effective August 1, 2009. Director Thompson led the discussion stating that hereafter this item will be reviewed and updated annually due to some volatility concerns. He said the District’s rate consultant, CH2M HILL, reviewed the updated rates and found them to be fair, reasonable and nondiscriminatory, and recommends the rates for approval. Thereafter, a member of the audience (Mark Loscutoff, 6323 North 115th Circle, Omaha, Nebraska 68164) inquired whether this action will promote the ability to exchange power with other utilities within the region. Vice President Easterlin addressed the question stating the District’s membership with Southwest Power Pool began on April 1, 2009 and allows OPPD to provide power to other companies and to purchase power from other companies through a more efficient mechanism. The agreement under consideration is to update the tariff for customers and contracts for agreements that were in place prior to April 1, 2009 and those customers will continue to be served through the Open AccessTransmission Tariff. The new customers will be served under the Southwest Power Pool. He said in answer to the question, this action will improve the efficiency of buying and selling power. Following the discussion, the vote was recorded as follows: McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Absent; Weber – Yes; Green – Yes; Hall – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5782 approves the award of Request for Proposal No. 3040 – 13.8 kV Outdoor Metalclad Switchgear – to Myers Power Products, Inc. in the amount of $190,330. Prior to discussion, Director Hall declared a point of order and introduced a motion on behalf of his Committee to postpone consideration of RESOLUTION NO. 5782, as well as RESOLUTION NO. 5783, which approves the award of Request for Proposal No. 3039 – Circuit Switchers for Substation 1341/Novozymes – to Southern States, LLC in the amount of $124,886. Director Dodge requested an explanation concerning the postponement of the two Board actions. Director Hall stated Novozymes contacted the District with notification there will be indefinite project delays and therefore it is his Committee’s position that the dollars not be spent at this time. Director Thompson inquired whether it is prudent to delay the award of the contracts with the knowledge that the proposals received on these two contracts are reasonable. Vice President Widoe agreed the prices are reasonable and stable and, although it is difficult to predict what will happen in the future, prospective prices are expected to remain relatively safe. Mr. Widoe also agreed with Director Hall’s summation that a cost-benefit analysis would indicate delaying these contracts until the Novozomes project resumes within 18-24 months is a practical decision and it makes good sense to control these costs in difficult budget years like 2009-2010. Thereafter, the vote was recorded as follows to indefinitely postpone Resolution No. 5782 and Resolution No. 5783: McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Absent; Weber – Yes; Green – Yes; Hall – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5784 approves the award of Request for Proposal No. 3034 – Install Non-Pervious Liner in North Omaha Station Ash Pond – to Lessard Contracting, Inc. in the amount of $511,818. Director McGuire inquired how the discharges from the pond will be handled. Vice President Widoe responded spoils materials will be collected, bagged, properly dried and disposed of in the on-site ash landfill. Following the discussion, the vote was recorded as follows: McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Absent; Weber – Yes; Green – Yes; Hall – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5785 approves the award of a contract to Alcatel for the purchase and installation of replacement microwave communication equipment for the District’s service area in the amount of $4,087,423. Director Hall led the discussion stating the Alcatel is the original supplier and is the only vendor that can provide the required services. The new equipment will replace 23 existing systems and will be phased in over the next five years beginning July 2009 and will be completed by November 2013. Board Chair Ulrich commented the existing system will remain in service during the upgrade to ensure continuous communications. Thereafter, Director McGuire asked whether the equipment belongs strictly to the District. Vice President Burke said OPPD owns and operates the system; however, the District has cooperative agreements with Washington County and Douglas County allowing the entities to share the central processing units. The assets for the Douglas County 911 System are housed by the District and are part of the same Motorola system used by Washington County. As other counties begin to replace their older equipment, Mr. Burke said opportunities will become available to partner with them as well. Following the discussion, the vote was recorded as follows: McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Absent; Weber – Yes; Green – Yes; Hall – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5786 approves the Engineer’s Certification and authorizes the District to purchase a used replacement transformer for Substation 983 near Yutan, Nebraska at a cost of $305,000. Following discussion, the vote was recorded as follows: McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Absent; Weber – Yes; Green – Yes; Hall – Yes; and Ulrich - Yes. The motion carried.
Copies of the foregoing resolutions are filed in the District’s Corporate Records file.
The next order of business was an opportunity for comment on other items of District business. There were no members of the general public wishing to address the Board. Board Chair Ulrich called a short recess at approximately 10:25 a.m. in order to prepare for the presentation of the J. M. Harding Award and scholarship award ceremony. At approximately 10:35 a.m. a representative from The Gallup Organization arrived. President Gates opened the 26th award ceremony, the first to be held in conjunction with an OPPD Board meeting. He welcomed Mr. Brinker Harding, the grandson of the late J. M. Harding, and indicated Brinker has attended nearly all of the past ceremonies. Thereafter, Mr. Gates introduced Board Chair Ulrich, who provided some historical background on the award. Director Ulrich commented Mr. J. M. Harding was Chairman of the Board when the District was formed in 1946 and his vision at that time was for OPPD to operate according to the highest standards of business and customer service. He said as energy efficiency has become more important over the years, the District has helped customers use energy more wisely through Continuous CommissioningSM, lighting retrofitting and other programs. Director Ulrich remarked that business leaders have long recognized the importance of energy efficiency to their bottom lines. To encourage those activities, OPPD annually takes the opportunity to honor a commercial or industrial customer who has demonstrated innovative and efficient use of energy. He said OPPD established the J. M. Harding Award of Excellence in 1984 and today the 26th award is being presented to The Gallup Organization (Gallup) and called upon President Gates to present the award. Mr. Gates provided background on Gallup, which was founded in 1935 by the late Dr. George Gallup. The organization has grown to 2,000 professionals serving clients around the world in approximately 40 offices and campuses. He commented Gallup established its campus headquarters in Omaha in 2003, becoming a leader in efforts to redevelop the downtown riverfront business area. Since then, Mr. Gates added Gallup has become one of Omaha’s corporate leaders in the areas of energy management and environmental stewardship and has demonstrated its commitment in both areas. He said in October 2008 Gallup, in conjunction with OPPD and the Energy Systems Laboratory at the University of Nebraska (based at the UNO Aksarben Campus), completed a Continuous Commissioning study for the offices at the Gallup Campus in Omaha. Implementation of the recommendations from this study has resulted in (1) a 15% reduction in electrical demand on the Gallup Campus, (2) a reduction of 30% in electrical consumption and (3) a 20% reduction in gas consumption. Thereafter, Mr. Gates introduced Ms. Jane Miller, Chief Operating Officer of Gallup, to accept the award. Ms. Miller commented on the strong partnership her company has with OPPD through not only assistance with energy efficiency efforts at Gallup, but a reciprocal partnership through the innovative employee engagement programs in place at OPPD. Thereafter, President Gates introduced two scholarship recipients and indicated the scholarship proceeds are funded from the Swigart invitational golf tournament. One
scholarship is given to a student from the University of Nebraska at Omaha with studies in an energy-related field and the energy-related field and the second scholarship to a student from Creighton University. Mr. Gates then introduced Troy D. Bailey, a UNO senior majoring in construction engineering technology. Thereafter, Mr. Gates called upon Song Q. Zheng, a Creighton University junior majoring in international business, to accept his award.
There being no further business, the meeting adjourned at 10:52 a.m.
Note: A brief, informal reception honoring the scholarship recipients and the J. M. Harding Award of Excellent recipient was held in Conference Room A in the OPPD Atrium.
A. J. Minks M. C. Bodammer
Assistant Secretary Corporate Secretary