22 June 2008
Co-op elects 5 new directors

Filed under Elections

PEDERNALES ELECTRIC COOPERATIVE

Co-op elects 5 new directors

The only incumbent seeking to keep his seat on board loses to newcomer.

By Claudia Grisales
AMERICAN-STATESMAN STAFF
Sunday, June 22, 2008
JOHNSON CITY — The Pedernales Electric Cooperative moved into its next phase of reform Saturday, electing five virtual outsiders to its 17-member board under new rules that signal the start of a more democratic era at the co-op.
More than 30,000 votes were cast for an unprecedented slate of 58 candidates running for five seats on the board. The one incumbent running for re-election, D.L. Ruff of Menard, was unseated.
Though the total votes represent a small portion of the co-op’s more than 225,000 members, the results signal a call for continued change at the country’s largest member-owned utility.
The co-op has had a tumultuous year. Several top executives and board members stepped down after disclosures of controversial expenditures that ranged from high-priced compensation packages to credit card purchases of Celine Dion concert tickets in Las Vegas.
State Rep. Patrick Rose, D-Dripping Springs, a co-op member who has been critical of the utility, said Saturday’s vote signaled a new beginning.
“It is a true victory for the co-op,” Rose said. But, he said, “we still have further to go.”
All five elected candidates ran on reform platforms, promising to bring transparency to the utility’s operations. In recent months, the co-op has hired two top officials, General Manager Juan Garza and Assistant General Manager Paul Hilgers, who have said they will push for new openness and other governance changes.
“I will make every effort to continue that change,” newly elected director James Williams, a former utilities manager who won by 452 votes, told members after the results were tallied at the co-op’s annual meeting in Johnson City. “Continue watching us.”
“I thank you for electing me,” international job development specialist Charles Tesar told about 250 members at the annual meeting, which was held at a co-op training center in Johnson City. That was about half the number that attended last year’s meeting. “I think a lot more needs to be cleaned up.”
For decades, the co-op’s nomination and election process was tightly controlled by the board itself, and challenges by outsiders were rare. This year, for the first time, candidates were nominated on petitions signed by at least 25 co-op members.
The new board members are Williams of Georgetown; Tesar of Blanco; Kathryn Scanlon of Austin, a former chief financial officer for several businesses; former state Assistant Land Commissioner Patrick Cox of Wimberley; and 20-year utilities veteran James Spellman of Johnson City.
The co-op’s leadership consists of seven directors with voting powers and 10 advisory directors. Three of the newly elected directors — Williams, Scanlon and Cox — will have voting power, meaning that the majority of the board will consist of the old guard of directors.
This year’s annual meeting took a drastically different tone than last year’s. In 2007, several co-op members railed against former General Manager Bennie Fuelberg and board members for their rebuff of inquiries about the co-op’s operations and their own pay. Some of those detractors drew jeers from co-op members who still supported the then-management team.
This year, members thanked the board for the changes while asking for additional reforms. It was also time for board members who were stepping down to say goodbye.
“The changes have been welcomed by many and reluctantly accepted by others,” board President E.B. Price, who took over in January but declined to seek re-election as director, said at the start of Saturday’s meeting.
Last year, co-op members weren’t aware that Fuelberg was garnering payments from a $2.3 million deferred compensation package on top of his annual pay. Fuelberg has resigned, as has former board President W.W. “Bud” Burnett. Advisory director Libby Linebarger also plans to step down after a review, and possible decrease, of director pay.
Median pay and benefits for directors in 2007 was $51,108 a year for part-time service. Total compensation for directors was $1.6 million, several times the amount at the country’s second-largest co-op, Jefferson, Ga.-based Jackson Electric Membership Corp.
This year’s board election was also absent of a prize giveaway system that awarded co-op members who signed their proxy ballots over to the board.
Last year, the proxy system drew more than 36,000 votes for sitting directors. Three challengers nominated from the floor drew no more than a 1,000 votes.
With all 58 candidates this year drawing ballots in their favor, it was anyone’s guess who would win. None of the winners garnered even a third of the votes. The winning directors won by totals that ranged from 4,535, in Cox’s case, to 8,885 votes, in Tesar’s.
The newly elected directors will represent certain areas in the co-op’s 24-county territory but had to run at-large.
The races were unencumbered by state campaign regulations, financial or otherwise. Some candidates ran on shoestring budgets, and others raised thousands to run ads and put up signs.
Spellman, for example, had only one sign, on the gate outside his ranch.
“I’m a goat rancher, probably the only goat rancher to be elected to the board,” said Spellman, also a General Electric Power Systems retiree, drawing laughter from the members.
Spellman won by 4,987 votes, unseating Ruff as an advisory director representing the co-op’s District 5, which includes Johnson City.
The co-op still faces a member-led lawsuit and legislative and criminal inquiries. Next week, a congressional committee is scheduled to hold a hearing about the disputed expenditures and past disclosure problems.
“We need diversity of opinion on the board, and I think the five new members are like that,” Garza said. “It’s going to be great. I’m excited.”
cgrisales@statesman.com

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2008-06-22  ::  admin