MAC Business Meeting: Year In Review

Curt Eischens, Council ChairAmy Fredregill, Managing Director

November 10, 2008

Theme: Pride in Our Past, Promise for our Future

We are proud of our co-op heritage and know we have a bright future if we work together to spread the cooperative message

– Minnesota is the leading cooperative state in the nation

– MAC is strong and growing and reflects the important of cooperatives in our state

– Unification with WFC has been very positive• Little has been asked and much support has been

given

Council Meetings

The MAC Council met in the spring and summer, besides the annual meeting

– Spring meeting focused on strategic planning • Governance changes recommended (to be

discussed later)• MAC Council is analyzing how to meet needs of

a growing membership

Spring meeting was held in conjunction with legislative sessionSummer meeting at Great River Energy

– Co-ops 101 and Director Liability Workshop scheduled day before

MAC Membership is Growing

– Membership continues to grow gradually despite mergers and acquisitions

– Largest growth in financial services and senior housing

– However, mergers primarily in grain and ag supply sector continue to offset part of our membership gains.

– Membership continues to diversify• Committees become even more important

with this diversification.

Total Number of Members Per Year

0

50

100

150

200

1998-99

1999-2000

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

Membership by Industry

2007-20082006-2007

2005-2006

2004-05

2003-04

2002-03

2001-02

2000-01

1999-2000

1998-99

Farm Supply/Grain 44 47 47 45 52 63 58 56 54 70

Housing 40 35 32 31 27 15 3 0 0 0

Electric 39 33 34 30 24 22 20 20 19 24

Associate, Individual and Trade Groups 26 18 18 16 18 18 17 21 12 6

Financial: Credit Unions, Insurance and Farm Credit 24 21 19 20 15 20 20 15 9 12

Dairy & Livestock 9 9 8 9 8 9 10 11 11 13

Consumer - Healthcare, retail and retail food 2 2 2 3 3 6 6 6 4 2

Marketing - Processing 2 2 2 2 2 2 2 2 2 5

Total 184 167 162 156 149 156 155 132 113 136

2007-08 Dues Revenue by Industry Sector

2007-08 Dues by Sector

Farm Supply, Grain, Fuel

Consumer

Financial Services

Utility (Distribution &G&T)

Dairy and Livestock

Housing

Associate

Processing

MAC Budget

MAC’s financial position continues to improve– MAC’s 2008 positive net of $54,000 on total

budget of just under $600,000

Review of dues formulas this summer resulted in minor changes:– 4% inflationary dues increase due to increases

in fuel costs, postage, and health insurance – 5% for senior housing cooperatives due to a

potential significant legislative initiative– Farm Supply, Grain and Fuel dues form

revamped to adjust to rapid price changes in fuel, fertilizer and other crop inputs

MAC Representation on WFC Board of Directors

The WFC Board is pleased with the continued strong progress being made in MinnesotaYour three representatives on the WFC Board actively participated in the Board’s activities and discussions– Neil Christy– Dennis Hunwardsen – Curt Eischens– Dave Hoelmer served as the alternate

WFC Board

– There is a very positive working relationship between MAC Council and WFC Board

– At WFC Board meetings, little or no attention is paid to what state the director lives in

– WFC Board relies on MAC Council to set Minnesota policy agenda, but actually invites MAC Council members to help advise on Wisconsin policies issues

Governance Committee Recommendations

Result of the MAC Council and WFC Board strategic planning processes– Both want to finalize the unification that

occurred in 2004

MAC reps on Governance Committee included Eischens, Hoelmer and Christy (3 of 8 members)Strong desire by both MAC Council and WFC Boards to operate under a new name that is not tied to a state or region The new organization would register under Minnesota cooperative law

Governance Committee Recommendations

Proposed board organization would substantially increase the representation of Minnesotans on the corporate board– This reflects the confidence the WFC Board has in

the growth of Minnesota membership– Never felt issues were decided in the WFC Board

meetings by what state the board member came from

Minnesota policy issues would be determined by a new state committee– Committee would handle the responsibilities of the

MAC Council– Wisconsin policy issues would be handled by a new

Wisconsin state committee since the WFC Board would no longer exist

Proposed Article and Bylaw Changes

Your representatives strongly encourage you to vote for the proposed changesPlease stay for final vote on Wednesday – only votes cast then will countPlease make sure you have read everything in your packets regarding the proposed Governance Committee changesIf you have any questions, please ask a MAC rep on the WFC Board (Eischens, Hunwardsen, Christy or Hoelmer) or staff

MAC Council Elections This Year

District Representative– 2– Current Representative is Paul Kent– 5– Current Representative is Curt Eischens– 6– Current Representative is Jim Tibodeau

Sector Representatives – Purchasing Local – Current Rep is Dennis

Hunwardsen– Marketing Dairy – Current Rep is Steve Schlangen– Marketing Livestock & Production-- Current Rep is

Jeff Reed– Utility Distribution – Current Rep is Tom Hayes– Consumer Housing - 2 years left remaining on

term, Janet Boland resigned.

– Financial Services – Current Rep is Dave Hoelmer

MAC CommitteesFarm Supply, Grain and Fuel – Twice yearly – Chair – Kelly Christianson, Roseau Farmers Union Oil

Utility Advisory Committee– June review of resolutions– Members: Hayes, Martens, Hjelle, Parsley, Tomes, Redalen,

Hauer, Heinz, NieuwsmaSenior Housing Network– Quarterly

Credit Union– Annually

Dairy– Three times per year

MACPAC– Assets rose to $10,500– 1st in person meeting today

Resolutions– Elected Chair – Steve Krikava– Elected Vice Chair – Jim Bareksten

2008 State Policy Initiatives

Livestock investment grant programMilk truck weight exemptionAg hours of serviceTax data match provisionRenewable energy mandates and greenhouse gas limits – co-op friendlyTransportation fundingGrassroots Action Alerts– thanks for responding

Adopt-an-Urban Legislator andCo-op Day at Capitol

Important to gain an understanding of cooperatives with new urban and new legislatorsMAC has initiated an “Adopt an Urban Legislator” Program– We will schedule meetings for you with

“Adoptees” in St. Paul or in your district – Bruce will explain more

Co-op Day at the Capitol is scheduled for March 11– Please let us know if you interested in attending– Need to have strong turnout to make an impact

Climate Change

Climate change working group– MAC will continue to play an active role on this

issue• Important to ensure legislators understand:

– The need for balance– The need to rely on science in making public policy– The need make certain new regulations are cost

effective – Legislative meetings being scheduled

• Bill Oemichen has been invited to meetings with state senate environmental leaders

– MAC is building alliances with other utility and agricultural organizations

– MAC has convened ag, trans, petroleum group– WFC/MAC has strong knowledge base and will

use this during debate on global climate change

Major Federal Policy Priorities

Farm Bill– MAC advocated for farm credit, grain, dairy,

energy, rural development, co-op capital and development, electric service territory, etc.

Mississippi River Locks and Dams– MAC (and WFC) part of national coalition to

ensure approval of funding for lock and dam modernization

CURE campaign

Chair of Gopher CURE chapter of national coalitionMet with Attorney General Lori SwansonMeetings with MN Congressional Delegation– Support obtained from most members – Strong partnership with WFC and Wisconsin

Congressional Delegation

Co-op CareHealth Care: State and Federal

– Farmers Health Cooperative of Wisconsin is a success and we are working for the state success in Minnesota

– Continue to work on Minnesota Department of Commerce approval process

• Slow and complicated since there is no defined application process

– Also investigating new opportunities with other partners that may not require formal state approvals

– Continue to administer USDA grants– MAC is playing an active role in state and federal

legislative health care policy development• Bill Oemichen testified before the U.S. Senate Small Business

and Entrepreneurship Committee (invited by Senator Norm Coleman)

• Amy Fredregill has been meeting with state legislators

Bioenergy

Bioenergy projects for co-ops in the Upper Midwest– Opportunities for both agricultural and forestry

biomass– Priority for MAC to ensure cooperative

ownership of biomass aggregation, processing and transportation

• Appropriations being sought from Congress to support WFC and MAC’s efforts

• MAC has also applied for a Minnesota Department of Agriculture grant

– Matt Krumenauer has been hired as new staffer to work with Bill, Amy and Tim on this project

Regulatory Issues

Red flag (identity theft) rule model policy for membersInfo on security of co-op depositsSPCC regs – trying to make rule less onerous. Supporting proposed rule that no longer requires professional engineer. Liaison with ag community for transmission siting.

Bickford project complete.– letter from EPA

MAC Education FoundationDirectors: – Eischens– Hayes– Hoelmer– Hunwardsen– Christy– Al Krysan – Mary Buschette– Bill Oemichen– Amy Fredregill

Fundraising drive Slettom Scholarship program

Foundation: Co-op Month

Fourth year of radio outreach campaign Governor’s proclamationCross industry marketing assistance

Foundation: Expanding and Integrating Co-op Curriculum

Speakers, case studies, field trips University of MN – CFANS Advisory Board– Partnering with Koller Chair– CHS Graduate Fellowship– Ag Working Group

Slettom Inducted Into Hall of Fame

Tributes to Slettom this year– Biographical Booklet– U of M Advisory Committees– Scholarship clearinghouse

• Please complete and return survey

Educational Opportunities

Recent:– Director Liability Workshops– Co-ops 101 Workshops– Credit Issues Conference– CoBank Customers Meeting Training Session

New:– Capital, Contracts and Risk Management

Conference• Thanks to CoBank, Cofina and ProPartners

Senior Housing Programs

300 attendees at 8th Annual Senior Housing Cooperative Conference, May 2008 Workshops Managers-only Network Golf tournament

Youth Conference

“Big MAC” MN Youth Cooperative Leadership Conference– 70 students, 15 chaperones at March 2008

conference – Thanks to local co-op sponsors, MN Credit Union

Foundation, CHS Foundation, CoBank and other sponsors

March 16-17, 2009– Please consider

sponsoring local youth

Discussion and Questions

• Overall, a very successful year for MAC

• Thanks for your membership and ongoing support during this important transition year

• We look forward to the continued growth and your active involvement

• Together, we can accomplish great things in the future

Thanks

Questions?

651-228-0213www.wfcmac.coop

Presentation of MAC Council

District Directors– 1 – Kelly Christianson – Roseau– 2 – Paul Kent – Mora– 3 – John Funk – Melrose– 4 – Bob Doane - Minneapolis– 5 – Curt Eischens – Minneota– 6 – Jim Tibodeau - Delavan

Council Industry Representatives

Financial Services – Neil Christy and Dave HoelmerMarketing Dairy – Steve Schlangen and Dave ScheevelMarketing – Livestock & Animal Breeding – Jeff ReedPurchasing Regional Supply – Lee UldbjergPurchasing Local Supply – Jerry Hasnedl, Jeff Nielsen and Dennis HunwardsenUtility Distribution – Tom Hayes and Audrey HjelleUtility – Generation & Transmission – Don Martens