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Board President’s Message – February 2020

Members to Vote on Bylaw Adjustments

In 2020, the Stearns Electric Association Board of Directors is asking the Cooperative’s members to approve proposed amendments to the Cooperative’s Articles of Incorporation and Bylaws.

As a not-for-profit electric cooperative, Stearns Electric is governed by a series of documents, including Articles of Incorporation and Bylaws, that were first established when the Cooperative was founded in 1937. These important documents provide a framework for governing and conducting business. As time passes, the energy industry changes, technology advances and member needs and expectations grow, it is important to periodically review and amend the Articles of Incorporation and the Bylaws in order to remain relevant and effective.

Over the last year a committee, including three Board members, Stearns Electric staff, an attorney and a third-party communication consultant, conducted a review of the Cooperative’s Articles of Incorporation and Bylaws. After reviewing these documents line by line and comparing them to Cooperative business procedures, future needs, and industry advancements, they identified and suggested necessary alterations. These suggested changes were then reviewed and discussed with the full Stearns Electric Board of Directors.

While the proposed amendments have been approved by the current Board of Directors, they cannot be placed into effect without approval by a majority vote of the members that participate in the voting process.

This membership vote will take place in conjunction with the Director elections and Annual Meeting on April 2, 2020.

Before your ballot package arrives in mid-March, we want to ensure that you feel educated to place your vote. While the bulk of changes proposed reflect an update in language and/or grammar to make the Articles of Incorporation and Bylaws easier to understand, the following summaries reflect the most significant amendments:

Removal of Outdated Language and Practices: Any language related to practices that have been discontinued over time by the Cooperative has been removed.

Simplified Requirements of Membership: Due to changes in technology and the sometimes lengthy and difficult process to secure written agreements with new members, the proposed changes simplify the process to become
a member and receive electric service from the Cooperative. The new language also reinforces that any entity receiving electric service from Stearns Electric is considered a member of the Cooperative and therefore bound to the Cooperative’s Articles of Incorporation and Bylaws.

Connecting to the Stearns Electric Distribution System: The proposed change addresses member-owned distributed energy resources,
such as wind generators and solar panels as well as other member-owned equipment. This change includes interconnection and other requirements to safeguard the Cooperative’s distribution system, its employees and members.

Director Positions: Proposed changes provide the Board of Directors flexibility for the future to adjust the size of the Board and district boundaries as necessary to maintain equitable representation for members in each district.

Director Tenure: Proposed changes eliminate director term limits. While the term length of three years will remain intact, directors would be able to run for an unlimited number of terms. Rapid changes in the energy industry and increased demands of directors require Board members to have extensive knowledge and certifications. Eliminating terms provides sufficient time to on board new directors, complete in-depth training and education courses, and allows the Cooperative to benefit from Board member training and experience.

Director Nomination Process: Proposed changes simplify the process for a member to run for a position on the Board by eliminating a complicated committee process and replacing it with a more efficient and secure application process which mirrors how an individual would apply to run for office in a standard government election.

Retirement of Capital Credits: Proposed changes remove the Board’s ability to retire Capital Credits early to members age seventy and over due to ADA compliance.

Director Vacancies: Vacancies in the past were filled by the existing Board of Directors. The proposed amendment would put that decision in the hands of the Cooperative’s members to vote on a replacement director.

Arbitration: Proposed changes allow the member or the Cooperative to choose arbitration instead of a jury trial, which typically can provide a speedier and less costly method to resolve disputes.

A summary and complete text of the proposed amendments to the Articles of Incorporation and Bylaws recommended by the Stearns Electric Board of Directors can be viewed at www.stearnselectric.org/about-us/2020BylawVote. In addition, each member will receive this information as part of their ballot package in March. Members will have the option to vote online, by mail or in person at the Annual Meeting on April 2, 2020.

We are confident these changes will result in more efficient operations at the Cooperative and better engage our members in the election process. We realize there is a lot of information presented here, so don’t hesitate to reach out to us during business hours at (800) 962-0655 if you have questions or comments regarding the proposed amendments.

Sincerely,

Randy Rothstein
Board President

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