MINUTES
Northwest Open Access Network
Meeting of the Board of Directors
March 11, 2015
Embassy Suites Hotel
15920 West Valley Highway
Seattle, Washington
The meeting of the Board of Directors of Northwest Open Access Network
("NoaNet") commenced at 9:00 a.m. on March 11, 2015.
Present
The following Board members were in attendance:
Ernie Bolz
John Jordan
Linda Gott
Doug Miller
Hugh Haffner (alternate)
Tim Nies
Rick Dunn
Don Queen
Paul Avis (alternate)
Bill Graham (alternate)
(Okanogan PUD)
(Pend Oreille PUD)
(Mason PUD No. 3)
(Pacific PUD)
(Clallam PUD)
(Franklin PUD)
(Benton PUD)
(Energy Northwest)
(Kitsap PUD)
(Jefferson PUD)
Also present were: Roger Wright (Franklin PUD); Ron Gadeberg (Okanogan
PUD); Rhonda Thomas (Pend Oreille PUD) (by conf. phone); Greg Marney (NoaNet);
Dave Spencer (NoaNet); Paul Harding (NoaNet); Angela Bennink (NoaNet); Don Cohen
(Gordon Thomas Honeywell).
Preliminary Remarks
President of the Board Linda Gott welcomed those present.
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Approval of Minutes
The minutes of the Board meeting of February 11, 2015 were presented for
approval.
Motion: Ernie Bolz moved, and Tim Nies seconded, approval of the
minutes of February 11, 2015. The motion passed.
Approval of Payments for January 2015
NoaNet Controller/Auditor Paul Harding commented on several entries.
Motion: Doug Miller moved, and Rick Dunn seconded, approval of
the expenses on the Payment Certification form for January 2015, dated
March 3, 2015. The motion passed.
Financial Report
Paul Harding stated that graphs and matrixes will appear only in quarterly
financial reports in the future, as more representative of trends than on a monthly basis.
With respect to the January financial statements, he noted that cash was lower than last
year, in part because of use of line of credit funds. Accounts receivable are much lower
than last year, and are 93% current. NoaNet is on budget for revenues, but is
experiencing considerable “churn” (non-renewal) of some accounts, primarily because of
NoaNet customers’ decisions to move traffic to their own networks. Mr. Harding
continued that sales are very strong, and, overall, NoaNet is off to a very good financial
start for 2015. He also commented on contributions in aid of construction resulting in
cash reductions. There was discussion throughout.
Transition of Banking Activities to Wells Fargo
COO Dave Spencer commented on implementation of the new line of credit with
Wells Fargo and transition of banking activities to the bank. He noted that, pursuant to a
request at a previous Board meeting, he had inquired and learned that NoaNet’s longterm bonds are not callable. Other alternatives are complicated, and since the bonds will
be paid off in 2016 in any event, it does not seem to make sense to pursue alternatives.
Mr. Spencer also commented on staff exploration of ways to reduce monthly interest
costs on the new line of credit. He will report back on that subject next month.
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Review of State Auditor Management Letter
CEO Greg Marney thanked the Audit Task Force members for their assistance in
dealing with the State Auditor this year. He described the exit conference. There were
no financial losses or fraud reported and no audit findings. The SAO management letter
made various recommendations on more detailed policies regarding expenses. Staff will
be working on developing these, in part based on examples from some NoaNet Member
policies.
Discussion followed. This included comments encouraging NoaNet, to the extent
possible, to closely control use of NoaNet credit cards especially for personal expenses,
even if they are reimbursed. There was also discussion of alternative ideas for disposing
of low valued and depreciated equipment used by employees leaving the organization.
Mr. Spencer stated that the Employee Policy Manual will be updated to reflect the
more detailed policies developed. Those will be brought to the Board at a later date,
pursuant to the State Auditor’s recommendation.
The importance of documentation for expenses was a common theme in the
SAO’s recommendations. Linda Gott noted that the tone of this year’s audit improved
significantly over time, and she expressed appreciation to NoaNet staff and Tim Nies in
particular for facilitating that. The fact that there was an auditor who had not been
involved with NoaNet previously made it necessary to help educate her as to NoaNet’s
business line and activities. NoaNet’s willingness to make improvements to its policies
and procedures also assisted in no audit findings being made. There were comments on
NoaNet’s evolution over time as to how NoaNet personnel handle tracking of expenses.
There were also comments that tracking and documentation of expenses are part of the
obligation of using public funds.
Additional discussion followed.
Jefferson PUD Issues
Bill Graham described an issued raised by a local internet service provider in
Jefferson County, challenging a particular Jefferson PUD based retail service provider.
At the PUD’s request, NoaNet had provided information regarding the RSP. Greg
Marney stated that NoaNet staff believes the challenge is groundless.
Member Report
Doug Miller provided an update on Pacific PUD’s telecommunications activities.
This included discussion of pilot programs with NoaNet involving an IP telephone
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system, as well as improved security and storage systems. The next Member Report will
be by Pend Oreille PUD. This is scheduled for the May meeting, although it may be
moved to June.
Operations and Marketing Report
Dave Spencer summarized recent upgrades to customer internet connectivity that
increase capacity, improve reliability, and reduce costs. He also described several
circuits turned up in February or scheduled for completion in March. Mr. Spencer also
described various staff activities under way aimed at improving NoaNet’s business
systems and technology. He also commented on the recent FCC orders on net neutrality
and eliminating state restrictions on broadband deployment. Discussion followed.
Mr. Spencer provided an update on sales activities, noting that February revenue
was very strong, despite the churn in some customer accounts. He also described
discussion underway regarding renewing several existing customer contracts.
Discussion of Recent FCC Order
Linda Gott provided an update on this subject from discussion at the APPA Policy
Council. Discussion followed regarding potential ramifications for Washington PUDs
and NoaNet, including the potential pros and cons of expanded telecommunications
authority. There was emphasis on the importance on having good, reliable service in all
areas of the state.
Executive Session
An executive session was convened at 11:25 a.m. to discuss legal issues regarding
the FCC Order with legal counsel. The executive session was anticipated to last
approximately 10 minutes. The executive session concluded at 11:42 a.m. No action
was taken during the executive session.
2015 Board Meeting Calendar
There was discussion regarding the Board meeting calendar for 2015. The July
meeting may be cancelled, but that will be determined at a later date. The Board meeting
will be at the NOC in Spokane in June and October. The August Board meeting will be
at the Washington PUD Association office in Olympia, with videoconferencing
capability. There may be no Member report that month. There was also discussion
regarding improving the audio in the conference phone connection to Board meetings at
Embassy Suites.
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Next Meeting
The next regular meeting of the Board of Directors will be April 8, 2015, at 9:00
a.m. at Embassy Suites at Southcenter.
Other Items for Discussion
It was announced that the Membership Account Task Force would be having its
first meeting following the Board meeting adjournment and lunch.
Doug Miller provided an update on Pacific PUD’s pole attachment lawsuit.
Adjournment
There being no further business, the meeting of the Board of Directors adjourned
at 11:50 a.m.
Respectfully submitted,
__________________________________
Greg L. Marney
Chief Executive Officer
Attest:
______________________________
Linda R. Gott
President of the Board
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