2018 Annual ReportDaviess-Martin County REMC

2018 ReviewLast year, Daviess-Martin County REMC was proud to receive national recognition for its dedication to employee and public safety. Your co-op completed the National Rural Electric Cooperative Association’s Rural Electric Safety Achievement Program (RESAP) certification. This program promotes the highest standards of safety among electric cooperatives. In 2018, our staff also worked 38,101 hours without a lost-time accident or serious incident.

Other notable events include three apprentice linemen who advanced to the next level in their careers —journeyman linemen. These employees completed four-year apprentice programs with more than 500 classroom hours and 8,000 hours of on-the-job training. Upon completion, graduates earn an Associate of Applied Science and a journeyman lineman certificate. Two additional office employees completed the 500+ hours of classroom study through the program receiving a diploma as well.

Capital Credit DistributionOne of the unique things about being an electric cooperative, is our ability to give back to our members. One way we do this is through retiring, or returning capital credits. In 2018, the board of directors approved $275,000 in capital credits to be returned to our members.

The amount of credits was based on how much the individual members paid to the co-op for electric service during the specific years involved and was distributed in either a bill credit or a check.

Member Appreciation DayAnother way we give back, is by celebrating Member Appreciation Day each year. On October 12, we invited our members to our office in Loogootee, to enjoy a free lunch and talk with the directors and employees of Daviess-Martin County REMC . We appreciate all the members who took time to attend.

Operation Round-Up Operation Round-Up continues to make an impact in our community thanks to the generous contributions from you—our members. Members who participate in this unique program allow the co-op to round up their electric bill to the next dollar each month. That spare change goes right back into our local communities, helping to improve quality of life for families, friends and neighbors.

The Operation Round Up Fund is overseen by a volunteer board that reviews applications, and distributes funds to local groups and organizations in the form of grants. This important program distributed $25,739 in 2018. Since the program began in 2004, $481,881 has gone back into the local communities.

Reliable, Affordable PowerSupplying our members with affordable and reliable energy will always be our top priority. Each year we dedicate substantial time and resources to right-of-way management, in order to keep outages to a minimum. We also have a comprehensive maintenance program to keep our equipment in good working order, repairing or replacing it when necessary. Our service area now

President and General Manager Report

Terry Chapman Daviess-Martin County REMC Board President

William (Bill) SchmidtDaviess-Martin County REMC General Manager

Cover Photo by REMC member, Sheila Corbin of Loogootee: Foggy morning on West Boggs Lake in Martin County

includes over 1,374 miles of energized lines serving 8,200 active meters.

Rates remained very stable in 2018, and we anticipate the same for 2019. There is a current forecast for a base rate increase in early 2020, and we will keep you informed as projections get reviewed.

Youth ProgramsEach year Daviess-Martin County REMC gives students amazing educational opportunities through Youth Tour to Washington, D.C. and Touchstone Energy Camp. High school seniors Melanie Hawkins and Katrina Sipes of Shoals represented Daviess-Martin REMC on the D.C. trip. Sixth grader Jayden Harger of Loogootee was selected to attend Touchstone Energy Camp at Camp Tecumseh.

Daviess-Martin County REMC also provides electric safety demonstrations for schools and community events geared towards the safety and education of our youth, is a strong supporter of 4-H and has become involved with local high school CEO programs.

This is YOUR Co-opYour electric cooperative is owned and controlled by you, the members. When you signed up for electric service, you became a part owner of the cooperative. The purpose of your electric cooperative is to provide the best possible service at the lowest possible rates. As member-owners of your not-for-profit electric cooperative, you share ownership and should be just as proud to celebrate 80 years of Daviess-Martin County REMC improving the quality of life in southern Indiana.

5:30 – 7:00 p.m.Registration

Registration gifts $10 electric bill credit Zippy Slim Dual Power Bank Food Sandwiches, popcorn, and drinks available

7:00 p.m.Business Meeting

Invocation John Edwards, Board Director

Presentation of the Colors Washington High School NJROTC

National Anthem followed by Pledge of Allegiance August Bauer, Board Secretary

Call to Order Terry Chapman, Board President

Board Secretary Report August Bauer, Board Secretary

Introduction of Directors

Approval of 2018 Annual Meeting Minutes Terry Chapman

Passing Upon Reports for the Previous Fiscal Year Terry Chapman

Legal Report/Director Election Brian Garrison, Attorney

Report of Manager Bill Schmidt, General Manager

Shortcut to Tragedy Chuck Tiemann, IEC Safety & Risk Mgmt

Prize Drawings

Agenda

the membership that the seats up for re-election at this meeting were for District 2, 5 and 7. Garrison reported the incumbents for those Districts had each timely filed a written notice at the office of the Corporation stating their intention to seek election on the board of directors. And, in addition, two nominations were received by Petition. One for District 2 from Amy Burris and one for District 7 from Joe Haworth. He stated a ballot vote would be held and had the incumbent director candidates along with the petitioning candidates stand when introduced. He asked the members to mark their ballots if they hadn’t already done so, fold them and REMC representatives picked them up. Mr. Garrison stated he would oversee the counting of the ballots with the assistance of REMC members John “Peanut” Knepp, Dennis Walton, Richard Burch and Greg Edwards along with some REMC staff. He further stated as provided by the Bylaws of the Cooperative, Board members may be elected by a plurality vote of the members present and voting and that drawing by lot shall resolve, where necessary, any tie vote. He then informed the members he would return with the results following completion of counting the votes.

General Manager, Dave Sutter, recognized special guests present at the meeting and thanked those that played a role in putting the event together including the Shoals School Corporation, the Shoals Band Boosters, the Washington High School ROTC, the Martin County Sheriff’s department, the REMC board of directors and staff, along with the REMC members in attendance.

Door prize drawings were then conducted by REMC employees.

Attorney, Brian Garrison returned to the podium to report on the results of the election. The director candidate receiving the majority of the votes for District 2 was Dean Harrawood, and he has been elected for a 3-year term. Since there was no challenger for District 5, director candidate, Travis Summers was elected for a 3-year term. The director candidate receiving the majority of the votes for District 7 was John Edwards, and he has been elected for a 3-year term.

The meeting was adjourned at approximately 7:50 p.m.

The 78th annual meeting of the membership of the Daviess-Martin County Rural Electric Membership Corporation was held on Thursday, April 5, 2018 at the Shoals High School. There were approximately 560 registered members present. The meeting commenced at 7 p.m. and marked the electric cooperative’s 79 years of service to its members.

Registered members received a $10 electric bill credit. Shoals High School Band Boosters prepared and served Polish sausages, hot dogs and popcorn. A video entitled Going the Extra Mile produced by Hoosier Energy was shown during registration.

Board President, John Edwards, gave the invocation. Presentation of the Colors was by Washington High School ROTC. Director, August Bauer led the group in singing the National Anthem followed by the Pledge of Allegiance.

The business meeting was called to order by President Edwards. Secretary of the Board, Steve Streepy was called upon to give the Secretary’s report. A declaration that a quorum of the membership was present was included in his report. President Edwards introduced each Director according to their district.

REMC member, David Redman motioned to dispense reading the minutes from the 2017 Annual Meeting and approved them as they appeared in the 2017 Annual Report. REMC member, Dave Redman seconded the motion. The motion carried.

President Edwards introduced and called upon REMC legal counsel, Brian Garrison, employed with the law firm of Faegre, Baker, Daniels for the legal report and director election.

As legal counsel to Daviess-Martin County REMC, Mr. Garrison advised the membership that he had no knowledge of any pending or threatened material litigation or other pending material legal transactions relating to the Cooperative. He further advised them that he had not been engaged by the Cooperative to give substantive attention to or to represent the Corporation in connection with any material litigation pending against the Cooperative.

Mr. Garrison stated that the process for electing directors was described in Article IV of the Corporation’s Bylaws. He informed

Minutes from the 2018 Annual Meeting

Balance Sheet

Assets: What We Own 2017 2018 Electric Plant - Value 44,215,330 45,136,968

Less Depreciation 16,146,090 16,899,397

Net Value of System 28,069,240 28,237,571

Investments & Restricted Funds 16,602,657 17,301,341

Cash 527,905 352,823

Accounts Receivable Less Reserves 3,572,688 3,407,270

Materials & Supplies 478,090 488,048

Other Debits & Accrued Assets 77,901 134,879

Deferred Debits 423,675 352,975

Total Current & Accrued Assets 5,080,259 4,735,995

Total Assets 49,752,156 50,274,907

Liabilities: Other Credits

RUS & CFC Loan Obligations 7,530,753 7,177,975

Accumulated Operating Provisions 1,022,207 925,900

Accrued Taxes, Payroll & Other 327,355 306,710

Accrued Interest 39,000 46,118

Notes & Accounts Payable 2,150,719 1,723,241

Consumer Deposits 191,591 189,477

Deferred Credits 565,824 455,735

Total Current & Accrued Liabilities 3,274,489 2,721,281

Total Liabilities 11,827,449 10,825,156

Net Worth

Other Margins & Equities 2,984,447 3,199,989.00

Patrons’ Capital - Prior Years 33,115,902 34,679,182.00

Patrons’ Capital - Current Year 1,824,358 1,570,580.00

Total Net Worth 37,924,707 39,449,751.00

Total Liabilities & Net Worth 49,752,156 50,274,907

Statement of Operations

Revenue 2017 2018 Electric Energy Sales 34,313,495 35,674,986

Other Revenue 258,039 269,813

Total Operating Revenue 34,571,534 35,944,799

Operating Expenses

Power Purchased 27,317,377 28,402,479

Line Operations & Maintenance 2,664,211 2,764,010

Consumer Accounts 457,271 508,541

Member Services 79,942 5,593

Administrative & General 1,072,488 1,223,505

Depreciation 1,468,563 1,474,218

Taxes (URT) 492,812 508,817

Interest on Long-Term Debt 382,006 365,083

Other Deductions 3,800 37,591

Total Cost of Electric Service 33,938,470 35,289,837

Equity

Operating Margins 633,064 654,962

Non-operating Margins 106,474 113,734

Other Capital Credits 52,874 53,293

Net Margins 792,412 821,989

G&T Capital Credits 1,191,294 915,617

Total Patronage Capital or Margins 1,983,706 1,737,606

Financial Report

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Board of Directors CandidatesTERRY CHAPMAN – DISTRICT 4

Terry Chapman is a lifelong resident of Harrison Township in Washington. Chapman is a 1974 graduate of Indiana State University with a bachelor’s degree in industrial management. He is employed as a shop manager at Loughmiller Machine Tool and

Design in Loogootee. Chapman has served on the REMC’s board of directors since 1992 and currently holds the office of president of the board and has held all other offices on the board in the past. He currently serves as Daviess-Martin County REMC’s director on the Indiana Electric Cooperatives board of directors. Chapman also served on the Southeast Daviess Fire District board of directors. He and his wife, Anna Lou, are the owners of RE/MAX Real Estate Merchandisers in Washington. They have one daughter, a son-in-law and one granddaughter. Chapman enjoys raising cattle and grain on the family farm and spending time with his family. The Chapmans attend Bethany Christian Church.

STEVE STREEPY – DISTRICT 1

Steve Streepy is a lifetime resident of Daviess County. A graduate of North Daviess High School and Ivy Tech, he has owned and operated the Elnora Body Shop, Inc. for the past 46 years. He is an active supporter of various school and community events. Streepy

has served on the REMC board since 1989 and has held all offices of the board. He received the National Rural Electric Cooperative Association Credentialed Cooperative Director certificate and the Board Leadership Certificate in 2003. Streepy served on the Indiana Electric Cooperatives’ board from 1999 through 2015 and held all offices on that board. Streepy and his wife, Jan, have two children and five granddaughters. He enjoys spending time with his family. The Streepys are members of Redemption Christian Church.

Mike Arvin, Manager of Corporate Services, 3

Nathan Albright, Journey Line Person, 25

Tyler Bostock, Journey Line Person , 1

Ryan Dant, Manager of Operations, 2

Jack Divine, Journey Line Person, 29

Mark Edwards, Mechanic/Utility Person, 42

Luke Emberton, Journey Line Person, 8

Sue Graber, Accountant, 34

Cheryl Harner, Cashier/Receptionist, 6

Rick Hill, Billing Representative, 3

Tony Massie, AMI Meter Technician, 17

Billy Matteson, Certified Staking Engineer, 26

Matt Miller, Journey Line Person , 6

Seth Noble, Journey Line Person

Ann Perkins, Service Coordinator, 6

Rob Powell, Manager of Engineering & Information Technology, 17

Karen Rayman, Consumer Account Representative, 17

Caleb Sanders, Journey Line Person, 6

Bill Schmidt, Exec. VP & General Manager, 1

Janice Sellers, Service Coordinator/Purchasing Agent, 20

Theresa Showalter, Administrative Assistant, 32

Alan Sims, Journey Line Person, 15

Denny Wilson, Journey Line Person, 29

Current Directors Current EmployeesDistrict 1: STEVE STREEPY Elmore, Madison, Steele and Bogard townships in Daviess County

District 2: DEAN HARRAWOOD, Vice-President Van Buren and Barr townships in Daviess County

District 3: DALE MARCHINO Washington and Veale townships in Daviess County

District 4: TERRY CHAPMAN, President Harrison and Reeve townships in Daviess County

District 5: TRAVIS SUMMERS, Treasurer Perry and Center townships in Martin County

District 6: AUGUST BAUER, Secretary Halbert, Lost River, Rutherford & Mitchelltree townships in Martin County

District 7: JOHN EDWARDS Marion and Spice Valley townships in Lawrence County

Daviess-Martin County REMClocal (812) 295-4200toll-free (800) 762-7362web dmremc.com facebook facebook.com/daviessmartincountyremc

This year, we are honored to celebrate 80

years of working in the local community, to supply

power, provide information, promote energy efficiency, and partner with local groups and organizations to improve the overall quality of life in our area.