HIGHLINE ELECTRIC ASSOCIATION REGULAR MEETING OF THE BOARD OE DIRECTORS May 18, 2017 A regular meeting of the Board of Directors of Highline Electric Association was 'held at the office of the Association in Holyoke, Colorado at 9:00 A.M. on May 18, 2017. ROLL CALL President Mike Bennett presided at the meeting. Directors present were: Mike Bennett Leo Brekel David Kinnison Jim Lueck Merl Miller Steve Oestman Merlin Prior Aaron Sprague Pam Stieb Ted Carter "Brad Stromberger Manager' Farnsworth. and. attorney' Williamson. were also jpresent. Attorney Williamson recorded the minutes of the meeting. AGENDA The Agenda was revised and approved as revised. MINUTES APPROVED The 'minutes of the .April 20, 2017 meeting were approved as presented. The minutes of the March 21, 2017 meeting held immediately after the 2017 annual meeting were approved as presented. Manager Farnsworth. presented. graphs of kWh. Purchased. and. Sold for April 2017. Farnsworth presented and reviewed the Ormat summary for April 2017. Highline recognized savings of $4,696.00 in April and $32,891.72 Farnsworth reported on the of the Department of Agriculture and RUS. .Farnsworth will invite Dan Hughes from Nebraska, and Jerry Sonnenberg, Jon. Becker? and. Cory" Gardner? all front Colorado to attend anl HEA Board.cnf Directors meeting. Farnsworth reported that Highline will again donate $100.00 to the area Councils, FFA Chapters, and Fire Departments and that HEA will apply for matching funds from CoBank. HEA will donate to Pedal the Plains again. Farnsworth reported that he has negotiated the swap of land with Don and Joyce Lebsack by which Highline will transfer 2.1 acres to the Iebsacks :ul exchange for 6.6 acres from t?ma Lebsacks. Highline will also vacate the current easement across Lebsack?s property in favor of a new easement from the.Lebsacks. It was properly moved, seconded and carried to authorize Manager F'arnsworth to execute the necessary documents to contract for and close on the exchange of the property. OPERATIONS REPORT Manager Farnsworth presented the May Operations Report as prepared by Rance Ferguson. Farnsworth discussed reporting' of the death of Golden. Eagles on. lines. He reported on the status of line crew projects. Farnsworth presented the safety committee report. There were no accidents. He presented the outage report. ENGINEERING REPORT Trent Loutensock presented the May 'Engineering Report. He reported CH1 the status of projects, the Sedgwick transformer, the AMI project, load control, the new mobile substation, and the BNN pipeline project. MEMBER AND CORPORATE SERVICES REPORT Dennis Herman presented the May Member and Corporate Services Report. The cushion of Credit balance was $2,166,458.17 as of 4/30/17. HEAL had $6,025,000 Inillion. in. CFC. investments as tof 5/11/17. HEA. paid $1,209.61 in fees on $112,200.72 worth of credit card payments in April. Herman reported on new services and. rebates. He jpresented. the Fornl 7, cash. flow, and. check register. The Highline Annual Meeting will be March 20, 2017. POLICY 2-7 Manager Farnsworth presented Policy 2?7. It was properly moved, seconded, and carried that Policy 2?7 be approved as presented. POLICY 2?15 Manager Farnsworth presented Policy 2?15. It was properly movedq seconded, and. carried. that Policy' 2?15 be approved. as presented. SAFETY COMMITTEE REPORT It. was jproperly* moved, secondedq and. carried. that the Safety Committee Report be approved as presented. APPROVE NEW MEMBERS It was properly moved, seconded, and carried that the list of new members listed below be accepted as members of Highline. Campa, Maria Christopher, Galen Cole, Morgan Depue, Mary Dilehay, Rozella Dobie Creek, LLP Edson.Farms, LLC Garcia, Henry Hart, Gregory Keneipp, Amanda Koberstein, Robert Kounkel, Jeff Lady Hunters Company Laso, Tina Lenhart, Alexis McCormick Fam Trust Michael, Arron Shelly, Gilda Gene Smith Revocable Trust Darrell Sterling Clover, LLC Stimmel, Herb Stumpff, Robert Timm, Victoria Wagner Estate, Grace Walmsley, Jenna SUBORDINATION AGREEMENTS CONTRACTS AND RELEASE OF LIENS It was properly moved, seconded, and carried that the following Subordination Agreements, Contracts, and Releases be approved: Contract Lien Releases Stanley Willmon?4 Richard Ruth Beckler Jimmy L. Spahr?3 Jimmy Spahr?2 Jeffrey Wallin?3 Subordination Agreements Dustin L. Schneller Rena D. Schneller?3 Aaron Schlachter Kendra Schlachter Ramirez Farms, Raymond J. Ramirez, Gillermo Ramirez Roxie K. Ramirez ?2 Deer Creek Farms Ltd. ESTATE CAPITAL CREDIT REFUNDS It was properly moved, seconded, and carried that the following capital credit refunds be approved: Jesus Gonzales 716.68 Burton E. Nass 1,872.74 POLICY 3?3 Manager Farnsworth presented revised Policy 3?3. It was properly moved, seconded, and carried that Policy 3?3 be approved as presented. POLICY 6-l Manager Farnsworth presented Policy 6?1. It was properly moved, seconded, and carried that Policy 6?1 be approved as presented. JULESBURG TRANSFORMER AGREEMENT Manager Farnsworth presented the proposed agreement with the Town of Julesburg for sharing the Julesburg Transformer owned by Highline. Farnsworth reported that under the terms of the agreement, Highline might use an existing Highline transformer to replace the Julesburg transformer if it fails. Julesburg would not pay Highline for that replacement transformer. If Highline purchases a new transformer to replace the Julesburg transformer, Julesburg and Highline would split the purchase price 50/50. It was properly moved, seconded and carried to approve the agreement as presented. ILIFF FRANCHISE Manager Farnsworth presented the Iliff Franchise agreement and resolution negotiated with and approved by the Town of Iliff. It was properly moved, seconded and carried to approve the franchise as presented. SOLAR RMI RFP Manager Farnsworth presented the bids for the RMI solar project. Tri?State recently revised Policy 115, lowering the credit to HEA for energy purchased by HEA from solar projects. Farnsworth reviewed the options available to HEA to finance DIY solar kits for-members. Farnsworth led a discussion regarding HEA Policy 6?4, which gives HEA members a rebate up to $4,000 for installing renewable distributed generation behind the meter. The Board will reconsider the policy if a community solar project becomes viable in Highline?s territory. Farnsworth reported that a consultant is talking to the North Sterling Irrigation District about investigating the viability of a community?hydro project on the North Sterling Reservoir dam. BAD DEBT Dennis Herman presented a proposed list of bad debts to be written off. It was properly moved, seconded and carried to write?off $13,075.81 as presented. MEMBER GUARANTEE Manager Farnsworth reported that BNN, a subsidiary of Tallgrass Energy, is requesting that Highline accept a guarantee from Tallgrass Energy in place of a cash deposit for its new account. Farnsworth presented the preposed parental guarantee agreement, which was revised by attorney Williamson. It was properly moved, seconded and carried to accept the Tallgrass Energy parental guarantee in place of a cash deposit. President Bennett recessed the meeting at 12:04 p.m. and reconvened at 12:50 p.m. TRI-STATE Leo Brekel reported on his attendance at the regular meeting of the Tri?State Board of Directors. The Tri?State Board approved a new stand?by rate that will go into effect in July. Margins are better than budgeted. Brekel reviewed Tri?State?s Long-term Financial Forecast. The forecast projects a 4.91% rate increase for 2018. Brekel presented a summary of Tri?State members? price paid per for the first quarter of 2017. Farnsworth presented an analysis of the effect of Tri?State's projected rate increases on.Highline?s future rates. CREA Jim Lueck reported on his attendance at the regular meeting of the CREA Board of Directors. He reviewed legislation from the 2017 session. WESTERN UNITED ELECTRIC Ted Carter reported on his attendance at the regular meeting of the Western United Board of Directors. Western United is expanding its business in Utah. The Western United Board is considering reducing the number of Board meetings from six per year to 4 per year. Carter asked for feedback from the other Highline Directors. The consensus of the Board was that Western United should centinue with six meetings per year but hold two of the six meetings via telephone or video conference. are 'Merlin Prior reported on his attendance at the NREA Legislative Committee meeting and the regular meeting of the NREA Board of Directors. The NREA General Manager is no longer employed by NREA. NREA received a refund from Federated of more than $80,000.00. CFC will hold financial workshops for co?op directors in Kearney, NE. -NREA will hire a new-Job Training Safety employee. The former NREA employee that is accused of embezzling money from NREA was indicted.on criminal charges. NREA hired an internal employee to be interim GM until a permanent GM can be hired. NREA received funds from its insurance carrier for the embezzlement. TRI-STATE CONTRACT COMMITTEE President Bennett reported on his attendance at the Tri?State Contract Committee meeting. The committee continues to discuss the 5% limit on purchasing energy from sources other than Tri? State. The committee is also discussing the Tri?State capital credit refund schedule. Bennett presented the results from polling questions answered by the committee members. EXECUTIVE SESSION It was properly moved, seconded and carried to go into executive session to discuss confidential personnel matters with the following in attendance: All directors, Farnsworth and attorney Williamson. It was properly moved, seconded and carried to come out of executive session. MEETING ATTENDANCE The directors discussed attendance at upcoming meetings. EMERGENCY BUSINESS Manager Farnsworth presented a corporate resolution for the sale of CHS stocki It was properly moved, seconded and carried to approve the resolution as presented. It was properly moved, seconded and carried to appoint Pam Stieb to the Revolving Loan Fund committee. PUBLIC COMMENT There was no Public Comment- ADJOURNMENT There being no further business to come before the meeting, the meeting was adjourned at 3:07 p.m. SECRETARY WMM PRESIDENT 4824-8367-7746, V. 1