UDWI REMC, new CEO making changes
As of his first meeting with the UDWI REMC Board of Directors on Monday, REMC CEO Doug Childs has had his plate full, but Childs is a man with an appetite.
Not one to shy away from big tasks, Childs has 32 years of experience in the industry and spent the last 22 years in municipal utilities, as Energy Management Administrator for the City of Hamilton, Ohio, as well as his prior service as the Director of Public Utilities for the city, managing 235 employees and an Operations & Maintenance and Capital budget in excess of $300,000,000.
Childs was very clear at Monday’s meeting about his plan to move the cooperative forward with transparency and communication, and the REMC board gave every indication of their commitment to his vision.
“This board has clearly demonstrated its desire to disseminate information quickly,” he said. “We took a huge leap forward tonight with steering the cooperative in a great direction moving forward.”
In a prior interview, Childs explained his interest in leading the issue-plagued cooperative.
“I think that I can make a real difference moving things forward and frankly I like the challenge,” Childs said. “UDWI has a great history. They’ve been in business over 80 years. When I interviewed with the board I felt great support and very much felt in unison with the direction they want to move the company going forward. I’ve never been one to shy away from challenges and I’m sure that we will be able to move the cooperative forward.”
Childs said his mission, and that of REMC, is to cut costs while keeping systems up, and has the unenviable task of re-building trust with REMC ratepayers. Childs’ lengthy background as a chartered financial analyst and financial and investment analyst for the University of Kentucky can only benefit the beleaguered utility.
In that light, several decisions were recently made and discussed Monday evening, including the recent decision by REMC to discontinue lifetime insurance benefits for board members. The insurance is not being eliminated for those already receiving coverage.
“With that decision, we are turning a $4.5 million dollar liability into a liability of about $1 million,” Childs said.
One opponent to the recent cost-cutting effort attended Monday’s meeting. Noble Stallons, who served as the cooperative’s General Manager and CEO from 1982 to 2000, gave an impassioned presentation urging the board to reconsider.
Stallons, who with his wife, Melba has been on the receiving end of the benefit, outlined his experience with REMC and said its retirees provide lifetime representation of the utility on a daily basis.
“A team approach works best,” he said. “I am asking you to keep the retired ones on the team by honoring the commitments and agreements this board agreed to in the past, for length-of-service and for loyalty to the members. Greene County people are survivors. UDWI REMC is one of the best co-ops in the state,” he continued, his voice cracking with emotion, “You’ve made it this way. The human asset adds value and I can give Doug a running start, building relationships.”
Childs said REMC is looking at every opportunity to save, while maintaining the system for members. The scrutiny and diligence demonstrated by the board has been largely guided by information obtained from phase two of an audit report done on the utility by independent auditing firm Blue and Co., LLC. Phase one results were not released to the public, due to the ongoing investigation by the FBI and the sensitive nature of the information it contains.
Phase two focused on board governance, including the review and signing of checks, board reporting, whistle blower policy and budget, among other topics.
The phase two audit results report can be viewed in its entirety by visiting www.udwiremc.com.
In response to audit results, the UDWI REMC board has enacted several of the changes recommended by the audit report, including an amendment to board policy 305.0, which deals with authorized signatures, money transfers and investments.
The board policy in effect required checks to bear the signatures of two out of four approved individuals: Board President, Board Treasurer, CEO and Manager of Office Services.
In keeping with the recommendation of the audit and the policies of other utility co-ops, the amendment removes the authorization of Board President and places spending thresholds and approval limits for disbursements.
The board also plans to make electronic payment an option for members, a measure that will save money on mailings as well as offer members an easier and more convenient way to remit bills.
Another change being actively pursued is dropping the seasonal rate system. A cost-and-service study is underway with the end goal as REMC moving members to a flat rate system.
Also on the agenda was discussion and approval of additional options for member voting. The board approved early and remote voting for members who cannot attend the annual meeting to vote. Voting will open 30 days prior to elections, and candidate lists will be made available earlier. Members will be able to vote remotely via internet. This option is expected to save about $40,000.
A big topic at Monday’s meeting was the issue of transparency.
Shane Smith gave a presentation in which he offered a proposed amendment to board policy 108.0, Member Requests for Cooperative Information. This policy defines procedures members must follow in order to request information from UDWI REMC.
Smith suggested four separate categories for information requests, each handled with increasing levels of security. Smith’s proposed categories were labeled a, b, c and d.
After some discussion, the board favored combining levels and reducing to just two. The topic was tabled, but is expected to be ratified by the end of the year.
The first level of information would include, as proposed, board policies, audit information, rate schedules and meeting attendance information. The next level included items such as number of employees, outage dates, donations and political contributions and capital credit information. The third, more formal proposed level contains items which would require specific forms and the submittal of a non-disclosure agreement. These are items such as budget information, staff reports, member names on petitions and other board policies. The final level proposed by Smith contained items deemed too sensitive to be released, due to their legally sensitive nature, the inclusion of third-party information and safety and privacy issues. These items included business plans, IT information, load requirements, information regarding ongoing investigations and Human Resources information.
With the paring of the levels to two, company transparency would be comprehensive, allowing members to receive any information except for information falling into the latter category.
“The vast majority of questions will be answered,” said Childs. “We plan to over-communicate with our members moving forward and make the information available. The only things that will be protected are those that for privacy and security reasons, can’t be divulged. There’s no easy way to get this cooperative to where we need it to be, but we will get there.”