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SCOTT COPELAND GENERAL MANAGER


all easier said than done. After some near misses on potential sites, Sayre City Manager, Guy Hylton, presented us with the perfect site. NFEC and Sayre city officials negotiated a trade of properties, resulting in a win-win result. Our architect & engineering firm walked us through


the long, detailed planning process to draw up the facility we had been discussing and dreaming of for years. Over 800 pages of detailed drawings and specifications later, construction finally began with a groundbreaking in October of 2014. Construction took approximately eighteen months, each one filled with the kind of challenges you would expect in building something from the ground up. Weather delays, sub-contractor issues, change orders, etc.; each day seemed to bring a new issue. Sometimes it seemed like we might not ever complete it. The day finally came to begin to move; a process that


took over a month before we were ready to begin operations from the new location. It seemed to take forever, but finally it was done and we were in and functioning from our new facility. The change has been a dramatic improvement for us in all phases. I hear on a daily basis from employees about recognizing the difference in their own productivity and effectiveness. We all knew that our performance was compromised at the old location. It’s hard to do your work when you are all cramped together, limited by space and unable to hear yourself think. Although we had problems and challenges throughout the process, everything had gone according to plan. Almost everything. From the earliest stages of discussion and planning, the


board, management, and our primary banker, agreed that based on our financial forecasts used for system planning, we should be able to build the facility without the use of long-term financing. A bridge loan was secured for the construction process and every indication was that at completion, we would pay down the majority, possibly leaving a small amount we could finance with an unsecured short-term note. If not for two major ice storms hitting us in the last


4-5 months of construction, that’s exactly what would have occurred. The November 27 storm, followed by the December 27 storm, caused over $4 million in emergency


repairs to the distribution system. Those costs were just to get the system back in operation, mostly temporary repairs. Today, we are still working to determine the costs for permanent repairs which will include the replacement of nearly one hundred miles of conductor. The total costs for these storms look to be in the $6-$7 million range. We will get consideration from FEMA for reimbursement of some of those expenses, but it is a long, slow process and there is no guarantee that it will come. The extent of the damage from the two storms, the


resulting cost of restoration, and the current downturn in the oil & gas industry came together in the final months of the construction process. The timing of those combined significant events forced us to seek secured long-term financing for the new facility. Cash flows and unsecured debt limits dictated by our RUS mortgage would not allow us to do anything short-term. While that wasn’t in our original plans eight years ago, it really wasn’t all bad news. Today’s interest rates make this move very attractive. In fact, had we known in the early stages of planning that today’s rates would be available, I believe this is the option we would have originally chosen. Also, this move will allow cash flows and reserves to recoup more quickly as we recover from the storm over the next few years. It has been a busy year at your Cooperative. Please come


and participate in NFEC’s 77th Annual Meeting of the Membership. As a member-owner, I encourage to take an active part in the future of our Cooperative. It will be a great day of fun, food, and fellowship with your fellow members. You will have an opportunity to win a very special grand prize that we are able to offer with assistance from our friends at the Farmers’ Cooperative Association in Sayre. One of the 7 Cooperative Principles is “Cooperation among Cooperatives” and we are very excited to have their participation in this year’s meeting. This year’s entertainment is sure to please, as the A Bar Bunkhouse Band will be with us. If you have never heard these young men perform their Bob Wills era music, you are in for a treat! They are very special and I know you will thoroughly enjoy them. See you there!


2015 Annual Report Page 5


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