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Home > About Us > Company > Board of Directors

December 2010 Board Meeting Minutes

                                              December 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 December 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, T. R. Vasquez, A. M. Davis, T. R. Monroe, G. R Williams, D. L. Stattler,  J. J. Hanson, and M. R. Jones.  Others present included E. Bergquist and J. Petr of Kutak Rock, D. Madison of IBEW Local Union No. 763, and Danielle Jensen.

 

                        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 December 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 October 2010 Comprehensive Financial and Operating Report and that the minutes for the last meeting be approved.  The vote was recorded as follows:  Ulrich – Yes; Weber – Yes, Cavanaugh – Yes; Dodge – Yes; Hall – Absent; McGuire – Yes; Thompson – Yes; and Green – Yes.  The motion carried.

 

(Director Hall entered the meeting at 10:04 am)

 

 

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. 5845 authorizes approval of the District’s 2011 Corporate Operating and Capital Expenditure Plan (Plan).  Director Thompson led the discussion by saying the Plan contains no general rate increase and a reduction in the Fuel and Purchased Power Adjustment from 2.6% to 2%.  At this time, Mr. Thompson asked Vice President Easterlin to give a brief overview of the Plan.  Mr. Easterlin began by stating the Plan’s projections are based on assumptions that include normal weather conditions, no general rate increase, a 2% Fuel and Purchased Power Adjustment, $31 million transferred from the Debt Retirement Account, and excess energy sold at market prices.  On the expenditures side, the District’s operating and maintenance expenditures are used to fund day to day operations and capital expenditures are to be used to maintain system reliability and serve existing and future load.   Mr. Easterlin noted the budget total dollar amount is the same between 2010 and 2011; however, the major cost categories of Non-Fuel O&M costs increased by $2.0 million over the 2010 budget amount, Fuel and Purchase Power costs increased by $24.0 million, Capital costs decreased by $22.0 million, Debt Service costs decreased by $5.0 million, and Payments in Lieu of Taxes (PILOT) have increased $1.0 million. Mr. Easterlin concluded the presentation by indicating the District experienced strong financial performance in 2010 and we will continue our short and long-term cost management efforts.  In addition, the Plan achieves the District’s strategic objectives of maintaining financial stability, high customer satisfaction, and competitive rates.  The Plan has also been recommended for approval by R. W. Beck.  Director Hall commended Senior Management and all employees for working to control costs in 2010.  Chairman Green indicated approval of the budget is one of the most important responsibilities for the Directors and noted it is significant that even with the anticipated $24.0 million increase in fuel costs, the District was able to partially offset those costs with savings thus avoiding a higher Fuel and Purchased Power Adjustment.  Following the discussion, the vote was recorded as follows:  Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; and Green – Yes.  The motion carried.            

 

                        RESOLUTION NO. 5846 declaration of anticipated 2011 expenditures reimbursement.  Director Thompson led the discussion indicating in accordance with federal tax regulations concerning financial proceeds, the adoption of this resolution maintains the option to issue tax-exempt debt obligations to reimburse 2011 capital expenditures and maximize the investment of the proceeds.  Since 1979 the District has utilized a financing plan that includes the reimbursement of the Corporate Operating Plan expenditures from the proceeds of tax-exempt or taxable debt obligations.  In addition, such reimbursement financing has been determined to be the most cost-effective and efficient means of avoiding arbitrage rebate restrictions on the investment of the proceeds. 

 

Following the discussion, the vote was recorded as follows: Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; and Green – Yes.  The motion carried.            

 

                          The next order of business was the Board’s consideration of the authorization for the creation and issuance of the 2011 Series Electric System Revenue Bonds. 

 

The Corporate Secretary read a motion to dispense with the reading in full of Resolution No. 5847 as follows:

 

                        BE IT RESOLVED THAT, because a copy of Resolution No. 5847 has

                        been furnished to each Director in advance of this meeting, the reading in

                        full of the 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. 5847.  The vote was recorded as follows:  Ulrich – Yes; Weber – Yes; Cavanaugh – Yes; Dodge – Yes; Hall – Yes; McGuire – Yes; Thompson – 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. 5847.  Mr. Petr confirmed there have been no material changes or additions to Resolution No. 5847 since its distribution to the Board.  

 

Chairman Green indicated that on October 14, 2010, the Board of Directors authorized management to execute the documents necessary to complete the sale of up to $120 million of taxable Electric System Revenue Bonds, 2010 Series A (Build America Bonds) (2010 Series A Bonds) and up to $150 million of tax-exempt Electric System Revenue Bonds, 2010 Series B (2010 Series B Refunding Bonds) upon acceptable market conditions through December 31, 2010.  The 2010 Series A Bond proceeds were to be used for valid corporate purposes of the District including reimbursing the District for previously incurred capital expenditures.  The 2010 Series B Refunding Bond proceeds were to be used to refund existing indebtedness of the District.

 

During November 2010, the District sold $120 million of 2010 Series A Bonds. However, due to the recent rise in tax-exempt interest rates, 2010 Series B Refunding Bonds have not been sold and are not expected to be sold through December 31, 2010.

 

Management continues to review debt service savings levels and believes that, if tax-exempt interest rates drop sufficiently in the future, it will be advantageous for the District to refund existing debt (including the 2005 Series A Electric System Revenue Bonds) with one or more new series of bonds to be known as the Electric System Revenue Bonds, 2011 Series (“2011 Series Bonds”).  The 2011 Series Bonds will be traditional tax-exempt bonds.

 

 

 

Chairman Green called upon Mr. Jon Petr for the opinion of Bond Counsel.  Mr. Petr confirmed that when the 2011 Series Bonds are issued in accordance with Resolution No. 5847,  Kutak Rock will be in a position to render its opinion that the bonds are validly issued and that the interest is tax exempt for federal and state purposes.  Chairman Green called upon Mr. Bruckner to provide the legal opinion.  Mr. Bruckner said his firm as General Counsel of the District, has examined the Preliminary Official Statement for the issuance of the Electric System Revenue Bonds, 2011 Series (“2011 Series Bonds”) and the form of Series Resolution No. 5847 (the “Series Resolution”).   It is the General Counsel’s opinion that the Board of Directors of the District may legally adopt said Series Resolution, authorize and approve the use of one or more Official Statements in substantially the form of the Preliminary Official Statement (together with such further modifications, updates and amendments as, in the judgment of the President and Chief Executive Officer or the Vice President and Chief Financial Officer of the District are necessary or appropriate for use in connection with the offering and sale of the 2011 Series Bonds) and authorize the issuance of the 2011 Series Bonds in an aggregate amount not to exceed $150 million. At this time, Mr. Bruckner provided the firm’s legal opinion to the Corporate Secretary.  Following the discussion, the vote was recorded as follows:  Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; and Green – Yes.  The motion carried.            

 

The next order of business was the Board’s consideration to approve the Official Statement and provide authority to execute the Pricing Certificate and Bond Purchase Agreement for the 2011 Series Bonds through December 31, 2011.     

 

The Corporate Secretary read a motion to dispense with the reading in full of Resolution No. 5848 as follows:

                        BE IT RESOLVED THAT, because a copy of Resolution No. 5848 and the

                          Preliminary Official Statement incident to the 2011 Series Bonds have been

                          furnished to each Director in advance of this meeting, the reading in full of the

                         Resolution and the Preliminary Official Statement in this meeting by the Secretary

                         be dispensed with except for those portions of the Resolution and Preliminary

                        Official Statement which have been materially revised and the additions necessary

                        to complete said Resolution and the Preliminary Official Statement.”

 

It was moved and seconded to dispense with the full reading of RESOLUTION NO. 5848.  The vote was recorded as follows:  Ulrich – Yes; Weber – Yes; Cavanaugh – Yes; Dodge – Yes; Hall – Yes; McGuire – Yes; Thompson – 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. 5848.  Mr. Petr confirmed there have been no material changes to Resolution No. 5848 or to the draft Preliminary Official Statement since its distribution to the Board.  

 

 

 

 

Director Thompson led the discussion stating due to the recent volatility of the tax-exempt market, the District’s Financial Advisor, Barclays Capital Inc., has indicated that it is in the District’s best interest to execute a Bond Purchase Agreement on the same day that a series of 2011 Bonds are sold.  To facilitate this, Resolution No. 5848 approves the Official Statement and provides authority for the President and Chief Executive Officer or the Vice President and Chief Financial Officer to execute Pricing Certificates and Bond Purchase Agreements for the 2011 Series Bonds through December 31, 2011.  This authority would allow the Bonds to be sold when acceptable market conditions exist regardless of the timing of regularly scheduled Board meetings.  A written opinion of the District’s Financial Advisor will certify to the Board that the terms for the 2011 Series Bonds reflect rates competitive with current market conditions.  Final pricing of any 2011 Series Bond issue will be presented at the scheduled Regular Board Meeting immediately following the execution of the Bond Purchase Agreement.  Chairman Green called upon Mr. Bruckner to provide the legal opinion.  Mr. Bruckner said his firm as General Counsel for the District, has examined the form Bond Purchase Agreement of the various named underwriters in the agreement for the purchase of Omaha Public Power District Electric System Revenue Bonds, 2011 Series (“2011 Series Bonds”) and the form of Resolution No. 5848 authorizing the retention of those Underwriters for the negotiated sale of 2011 Series Bonds.  Mr. Bruckner also indicated it is the General Counsel’s opinion that the Board of Directors of Omaha Public Power District may legally adopt Resolution No. 5848 authorizing the President and Chief Executive Officer or the Vice President and Chief Financial Officer of the District to execute and deliver one or more Pricing Certificates and Bond Purchase Agreements for the 2011 Series Bonds through December 31, 2011.  At this time, Mr. Bruckner provided the firm’s legal opinion to the Corporate Secretary.  Following the discussion, the vote was recorded as follows:  Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; and Green – Yes.  The motion carried.   

 

                        RESOLUTION NO. 5849 authorization for management to negotiate and award a contract(s) for the replacement of the turbine driven auxiliary feedwater pump at the Fort Calhoun Station.  Director Dodge led the discussion stating the motion to waive the sealed bid requirements arises out of the unique and complex nature of the turbine driven auxiliary feedwater pump.  The pump is original equipment and was installed 40 years ago, and the pump is the only one of its kind in the nuclear industry.  The pump’s function is to remove reactor debris heat in the case of an emergency shutdown and loss of power.  The pump is no longer being manufactured and the support to service or repair it is becoming increasing limited.  The engineering, procurement, and installation are complex processes and it is critical that the District have the ability to communicate openly with vendors and manufacturers.  Mr. Dodge indicated the Nuclear Oversight Committee recommends Board approval.  Chairman Green inquired about the process to obtain the new pump.  Vice President Bannister indicated the District will go to a number of manufacturers who meet the design specifications and has the operating history in the nuclear industry.  Following the discussion, the vote was recorded as follows:   Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; and Green – Yes.  The motion carried

 

 

 

                        RESOLUTION NO. 5850 authorization to sell the North Bend Office as surplus property.  Director McGuire led the discussion stating that in July 2010 the Board authorized the sale of the property for the best price over 90% of the appraised value.  At that time the property was appraised at $105,000.  Seven bids were received in October and the highest bid was $53,999. The property was reappraised for $67,000; however the bid for $53,999 was still below the 90%   appraised value which was $60,300. In addition, the District spends approximately $14,000 per year on maintenance and other operating expenses, and Ms. McGuire recommends it would in the District’s best interest to accept the bid of $53,999.   Director Thompson inquired if the property was offered first to public entities.  Vice President Minks indicated if appraisals are over $100,000, the District is able to accept bids from any interested party.  Following the discussion, the vote was recorded as follows:  Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; and Green – Yes.  The motion carried. 

 

                       RESOLUTION NO. 5851 approval of compensation adjustments for Corporate Officers.  Director Ulrich led the discussion by indicating compensation adjustments for corporate officers are approved by the Board of Directors on an annual basis and today the Board is being asked to vote on compensation adjustments for President Gates and Vice President Edward Easterlin.  Mr. Ulrich commented on Mr. Gates’s leadership both on a local and national level and his competency in running this utility.  He also spoke of Vice President Easterlin’s leadership on the bond financing programs and controlling costs and minimizing rate increases.  Mr. Ulrich proposed a 2.75% increase which would place Mr. Gates at 62.5% of midpoint and Mr. Easterlin at 61.6% of midpoint.  Also due to an oversight, Mr. Easterlin’s increase should have been voted on at the November meeting.  Following the discussion, the vote was recorded as follows:  Ulrich – Yes; Weber – Yes; Cavanaugh – Yes, Dodge – Yes; Hall – Yes;  McGuire – Yes; Thompson – Yes; and Green – Yes.  The motion carried. 

 

                          Copies of the foregoing resolutions are filed in the District’s Corporate Records file.    

 

                          There being no further business, the meeting adjourned at 10:40 a.m.

 

 

 

 

Edward. E. Easterlin                                                     D. S. Emerson             

Assistant Secretary                                                       Corporate Secretary

 

 

Board of Directors

bullet Board Mtg Schedule
bullet Board Mtg Minutes
bullet Committee Mtg Agendas
bullet Board Mtg Agenda
bullet Rules for Public Participation
bullet Approved Board of Directors Redistricting
bullet Preliminary 2014 Corporate Operating Plan
bullet Sustainablity Update March 20 2014
bullet Energy Assistance Program (EAP)/Common Fund

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