[Watchdogs] PEC Board dissolves Envision, rescinds Burnett supplemental retirement pay [PEC Press Release from the Web Site]

[Milton Hawkins]

[The KPMG delay bears watching, and we'll hope AIG stays afloat!  $20,000
would have been ample. - Milton]

 

Press Releasehttp://www.pec.coop/Images/UtilImages/spacer.gif

February 24, 2009
FOR IMMEDIATE RELEASE

PEC Board dissolves Envision, rescinds Burnett supplemental retirement pay

At its Feb. 23 regular meeting - which marked the one-year anniversary of
Pedernales Electric General Manager Juan Garza's hiring - the PEC Board
voted to dissolve the Envision Software Corporation, rescind a 2001
resolution authorizing supplemental retirement pay to former Board president
W.W. Burnett and ratify actions taken to investigate the Cooperative's
former legal counsel, Clark, Thomas & Winters. All Envision software
products and personnel will be rolled into PEC. Burnett's retirement package
will be reduced by $4,895.05 per month starting March 1. 

PEC Board members also heard a report from KPMG representative Anthony
Berrett on the Cooperative's 2007 financial audit. KPMG has yet to issue an
opinion on the 2007 audit due to questions about the method used in
accounting for contributed capital: underground electric facilities built by
subdivision developers for Pedernales Electric and then donated to the
Cooperative. KPMG has audited PEC for 11 years, and prior KPMG audit
opinions have recognized PEC's accounting of these facilities as within
generally accepted accounting practices. KPMG is currently further examining
the issue, but the firm's representative was unable to provide a firm
timeline as to when it will be settled, much to the consternation of PEC
Board members. 

The Board also renewed its director/officer insurance coverage with AIG,
heard a status report on the ongoing C.H. Guernsey & Company rate analysis
and cost of service study and received a report that all bank accounts at
Cattleman's National Bank have been closed. The Board, of its own volition,
also authorized a $30,000 bonus to Garza for his performance in 2008. 

"I appreciate very much the confidence the Board is showing me, and to the
(Board) members who were here who hired me, I want to again express my
appreciation to all of you for bringing me on board," Garza said. "I think
we've done a lot of things that we can all be proud of, and I want to remind
the Board that the accomplishments of this last year are not the
accomplishments of one person. I'm proud to be here."

District 5 Advisory Director James Spellman provided a progress report on
PEC's efforts to implement plans to further conservation and renewable
energy initiatives, noting that he had received information on the recently
passed federal stimulus package's tax savings and energy-efficiency grant
elements. Spellman also recommended approaching the Lower Colorado River
Authority, Pedernales Electric's primary wholesale power provider, to
solicit incentive funds for PEC's conservation activities. Since
conservation efforts at the Cooperative level could have an impact on
reducing LCRA's generating needs, Spellman said he thought there could be a
natural avenue of support from the LCRA.

PEC Interim General Counsel Luis A. Garcia reported that all parties
involved with Texland Electric Cooperative had agreed to move the more than
$500,000 in Texland funds held at Cattleman's National Bank into a registry
of the court, essentially a bank account controlled by the court overseeing
the legal proceedings. This would allow the funds to begin accruing interest
while the interpleader action taken by Cattleman's and the corresponding
countersuit filed by Texland unfold. The funds have not yet been deposited
in the registry of the court because the Texas Rangers, who froze the
account at Cattleman's, must first approve the action. 

The Board also ratified changes to PEC's bylaws that addressed 2009 Board
election rules. Two sections in Article III of the bylaws were waived until
after the June Board election, so actions filling expired Board positions
and appointing Advisory Directors-at-large can wait until after the Annual
Membership Meeting.

During the General Manager's Report, PEC Governance Counsel Pete Slover
reported on the recently filed legislation aimed at Texas electric
cooperatives. He noted that while some proposals in the legislation adopt
practices currently incorporated at Pedernales Electric, some aspects would
treat PEC uniquely and differently from other co-ops in the state. PEC, for
example, would be required to get prior approval from the Public Utility
Commission of Texas before it can embark on any electricity generation
project and be mandated to elect its directors by single member districts.
PEC plans to meet with Texas Electric Cooperatives, the statewide
organization representing co-ops in Texas, and the LCRA to further discuss
and review the proposed legislation.

The Board approved donating $500 each to 35 high schools within and near the
Cooperative's service territory for Project Graduation functions and also
heard a presentation from the Austin Chamber of Commerce soliciting support
for the chamber's Opportunity Austin 2.0 project. 

Member comments at the meeting included questions about the delay of the
2007 audit opinion and a request the Board delay ratification of the bylaws
until they can be studied further. The Board concluded by announcing its
next meeting will be held at 10 a.m. on March 16, 2009, in Marble Falls. The
meeting venue will be the Lakeside Pavilion at 307 Buena Vista Drive; maps
to the meeting are posted on www.pec.coop.

 

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