MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS

MENARD ELECTRIC COOPERATIVE

PETERSBURG, ILLINOIS

MAY 27, 2008

The monthly Board Meeting of the Board of Directors of Menard Electric Cooperative was called to order by President Gary L. Martin at 6:00 P.M. at the headquarters of the Cooperative, 14300 State Highway 97, Petersburg, County of Menard and State of Illinois.

On roll call the following Directors were present: Jerry W. Brooks, Michael L. Carls,  D. Jay Frye, Warren D. Goetsch, James G. Graff, Gary L. Martin, Donald E. McMillan, Roy H. Seaney and Steven L. Worner.  Also present was Manager Lynn A. Frasco and Attorney Charles K. Smith.

President Martin reviewed with the Board the Consensus Agenda.  It was moved and seconded that the Consensus Agenda be approved.  Motion carried. 

Manager Frasco presented the Manager’s Report for the month of April, 2008.  He reviewed the Balance Sheet, Budget, as well as the Outage Summary and Safety Report.  President Martin called the Board into Executive Session to discuss employee issues.  President Martin adjourned the Executor Session and reconvened the monthly Board Meeting.  Under the Operations Report, Manager Frasco advised that the Capital Credit checks would be sent out the second week of June. He discussed the check the Cooperative had received in the sum of $11,826.17 as a refund for environmental removal activities at PCB Treatment Sites, pursuant to the terms of a Consent Party Settlement Agreement.  He reviewed with the Board a Partial Service Area Agreement for territory around the City of Athens between the Cooperative and AMEREN.  The Agreement included a new boundary map assigning two new services to Menard. It was moved and seconded that the President and Secretary be authorized to enter into the Agreement, so that such could then proceed to the Commerce Commission for approval by the Commission. Motion carried. Manager Frasco discussed the status of irrigation construction. He also reported on the status of work at the Lost Arrow Campground and the problem that had arisen as a result of improper wiring of new pedestals installed at Lost Arrow.  The improper wiring was done by the manufacturer of the pedestal.  It was moved and seconded the Manager’s Report be approved as presented. Motion carried.

Manager Frasco presented the Financial Report for the Month of April.  Year to date margins were $800,973 compared to ($6,106) a year earlier.  Equity as of the end of April was 33.77% and the number of members served was 10,357 compared to 10,232 a year ago.   Net Utility Plant at the end of April was $33,489,726 compared to $31,939,310 last year.  The cooperative continues to meet the requirements of the RUS, FFB and NRUCFC.

Manager Frasco reviewed with the Board a proposed Two Year Audit Agreement with Auditors Dreyer & Kelso. It was moved and seconded that the President and Secretary be authorized to enter the Two Year Engagement Letter with the Firm on the terms as set forth therein. Motion carried.

President Goetsch reported on AIEC Activities and reviewed the 2008 IEC Memorial Scholarship winner.

Director Carls and Manager Frasco discussed matters with regard to Prairie Power, Inc. 

Director Brooks reported on the status of plans for the Annual Meeting scheduled for June 7, 2008. He reminded the Board Members that the dinner started at 4:30 with the Business Meeting at 6:30 p.m. He advised that there would be an Annual Meeting Committee Meeting on Wednesday, June 4, 2008 at 9:00 a.m. 

Manager Frasco distributed the materials to the Board Members for discussion with regard to the 2009 New Rate Design adjustment.  There was much discussion by the Board with regard to proposed changes to Cooperative rates for 2009.

Manager Frasco presented the Capital Credit Estate Refunds Report.

Director Graff, President Martin and Manager Frasco attended the NRECA Legislative Conference and discussed with the Board their impressions of the Conference.

President Martin reminded the Board that the next Board Meeting was scheduled for June 24, 2008 at 6:00 p.m.

There being no further business to come before the Board, it was moved and seconded

the Meeting be adjourned.  Motion carried.