September 16, 2010
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 September 16, 2010, at 10:00 a.m.
Present were Directors M. J. Cavanaugh, N. P. Dodge Jr., J. K. Green, G. C. Hall, A. L. McGuire, J. R. Thompson, F. J. Ulrich, and D D. Weber. Also present were W. G. Gates, President and S. M. Bruckner and T. F. Meyerson, General Counsel for the District. Mr. Green, Board Chair, presided, and Ms. Emerson, Corporate Secretary, recorded the minutes. Other members of Management present were D. J. Bannister, T. J. Burke, M. I. Doghman, E. E. Easterlin, J. T. Hansen, A. J. Minks, J. W. Thurber, R. C. Shaneyfelt, T. R. Vasquez, A. M. Davis, J. J. Hanson, M. R. Jones, and D. L. Stattler. Others present included E. Bergquist and J. Petr of Kutak Rock, and C. Perkins of IBEW Local Union No. 763.
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 September 10, 2010; 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 July 2010 Comprehensive Financial and Operating Report and that the minutes and the approved absence of Director Cavanaugh for the last meeting be approved. The vote was recorded as follows: Hall – Yes; McGuire – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes, Cavanaugh – Abstain; Dodge – Yes; and Green – 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.
The next order of business was the Board’s consideration of a new Credit Agreement.
RESOLUTION NO. 5830 authorizes execution and delivery of a Credit Agreement to Bank of America, N.A. in the amount of $250 million to support the Commercial Paper Program and to provide additional liquidity for other expenditures of the District. Director Thompson led the discussion stating the District’s Commercial Paper Program requires a Credit Facility equal to the $150 million program size to provide adequate liquid funds to pay principal and interest on the Commercial Paper. The District’s current Credit Facility is scheduled to terminate on October 1, 2010. The Credit Facility will provide for additional liquidity including support of future capital projects, the District has identified the need for an additional $100 million. Bank of America, N.A. has agreed to extend a credit facility in the amount of $250 million to the District in support of the Commercial Paper Program and to provide funding for other capital expenditures. At this time, Director Thompson called upon Mr. Bruckner to provide the legal opinion. Mr. Bruckner stated his firm participated in the preparation of a credit agreement with Bank of America N.A. to extend a line of credit in the amount of $250 million in support of the District’s Commercial Paper Program and also to provide funding for other general corporate expenditures. Mr. Bruckner’s firm has also reviewed the proposed resolution, Resolution No. 5831, that was read by the Corporate Secretary, and it is the opinion of the firm that the Board of Directors may legally adopt Resolution No. 5831 and also authorizes the officers of the District to execute the Credit Agreement with Bank of America N. A. in the amount of $250 million. At this time, Mr. Bruckner provided the firm’s legal opinion to the Corporate Secretary. Director Thompson inquired if use of the $100 million has to have approval of the Board of Directors to utilize all or any portion of those funds. Vice President Easterlin indicated as the agreement is written it does not require Board authorization and the use of those funds would be at the discretion of management on the most economic source of financing or the additional need for liquidity. Mr. Easterlin said the Board could choose to place that requirement on management. Mr. Easterlin added if it became advantageous to increase the size of the Commercial Paper Program from $150 million, management would already have back up credit behind it. If that route was taken, management would come back to the Board for authorization to increase the amount of outstanding Commercial Paper.
Director Green inquired if upon approval by the Board, the rate would need to be disclosed. Mr. Bruckner indicated if the rate has been designated as confidential by the bank, it is not subject to the Open Meetings Law. Following the discussion, the vote was recorded as follows: Hall – Yes; McGuire – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; and Green – Yes. The motion carried.
The next order of business was the Board’s consideration to amend the existing Commercial Paper resolution.
The Corporate Secretary read a motion to dispense with the reading in full of Resolution No. 5832 as follows:
“BE IT RESOLVED THAT, because a copy of Resolution No. 5832 has
been furnished to each Director in advance of this meeting, the reading in
full of that Resolution in this meeting by the Secretary be dispensed with
except for those portions of the Resolution which have been materially
revised and the additions necessary to complete said Resolution.”
It was moved and seconded to dispense with the full reading of RESOLUTION NO. 5832. The vote was recorded as follows: Hall – Yes; McGuire – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; and Green – Yes. The motion carried.
Following the preceding vote, Board Chair Green called upon Mr. John Petr, a partner with Kutak Rock, the District’s Bond Counsel, for changes to Resolution No. 5832. Mr. Petr confirmed there have been no material changes to Resolution No. 5832 since its distribution to the Board. Mr. Petr also indicated it is his firm’s opinion that enactment of Resolution No. 5832 will not adversely affect the District’s tax exempt status of interest on the District’s Commercial Paper Program.
Director Thompson continued the discussion on Resolution No. 5832 and indicated the credit rating agencies require that the District covenant that the unused amount available under the Credit Agreement be at least equal to the outstanding principal amount of Commercial Paper Notes (currently at $150 million) at all times. The credit rating agencies also require that the District place restrictions on the amount of Commercial Paper Notes maturing on a daily and weekly basis. He also indicated that this resolution amends the original Commercial Paper resolution to incorporate terms of the new Credit Agreement and to make the required changes from the credit rating agencies. Director Thompson called upon Mr. Bruckner to provide the legal opinion. Mr. Bruckner said his firm is prepared to present its opinion that Resolution No. 5832 has been reviewed which authorizes the continuance of the District’s Commercial Paper Program and it his firm’s opinion that the Board of Directors may legally adopt Resolution No. 5832. At this time, Mr. Bruckner provided the firm’s legal opinion to the Corporate Secretary.
Director Green inquired if the District draws on the line of credit, will the District always have a $150 million line of credit available. Mr. Easterlin indicated we have an amount equal to the amount of outstanding Commercial Paper. If the District increases the size of the program, then the District would need to reserve and covenant an additional amount of capacity. If we were to pay some of it off with our funds, we would not need to have as much reserved to support the Commercial Paper Program.
Following the discussion, the vote was recorded as follows: Hall – Yes; McGuire – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; and Green – Yes. The motion carried.
RESOLUTION NO. 5833 approval of the Engineer’s Certification and authorization for management to negotiate and award a contract or contracts for 480 volt circuit breaker replacement material and services. Director Dodge led the discussion indicating that during the 2012 and 2014 outages at the Fort Calhoun Station there are 63 480 volt circuit breakers that need to be refurbished or replaced. The breakers were installed in 1972 and refurbished in 1992. He also said that General Electric no longer manufactures or supports the breakers. Therefore, it has been determined by the engineering staff to be less expensive to replace the breakers rather than refurbish them. The procurement and installation of this equipment requires exact technical specifications, and to meet the required specifications, it’s critical that the District be able to openly negotiate with various contractors. For these reasons the Nuclear Oversight Committee is recommending the District be authorized to negotiate a contract or contracts for the procurement of engineering material and non labor services to replace the 480 volt circuit breakers. He added the contract or contracts would be broken down by material and labor. Most of the labor will be provided locally; however, the supervision will be conducted by the successful vendor. Following the discussion, the vote was recorded as follows: Hall – Yes; McGuire – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; and Green – Yes. The motion carried.
Copies of the foregoing resolutions are filed in the District’s Corporate Records file.
The next order of business was the presentation of the J. D. Power Award. Director Green indicated Mr. Destribats was not able to be present due to travel issues. The item was deferred and the presentation will be made at the October Board meeting.
There being no further business, the meeting adjourned at 10:20 a.m.
A. J. Minks D. S. Emerson
Assistant Secretary Corporate Secretary