[Watchdogs] Some Thoughts on the PEC Board's Failure to Rescind the Fuelberg Directive
milton.hawkins at gmail.com
Wed Sep 22 17:07:03 CDT 2010
Some Thoughts on the PEC Board's Failure
to Rescind the Fuelberg Directive
At the beginning of the discussion of the rescission resolution at Monday's
Board meeting, the acting general counsel, Aisha Hagen, clearly indicated
that she wanted the Board to rescind the Fuelberg directive (see below, from
the Navigant Report), and later both she and the acting general manager,
Luis Garcia, alluded to the ambiguity that surrounded, and would surround,
the question of whether or not the Purchasing Policy passed earlier made the
rescission of the Fuelberg directive unnecessary.
Later, a number of directors used the terms moot and supersede in discussing
the matter, offering their own "legal" analysis, and completely overwhelming
the opinions coming from the acting general counsel, who finally
It is clear to any objective observer (see the video) that, for whatever
reason (and several were advanced), a number of the directors were reluctant
to vote on a resolution to rescind the Fuelberg directive.
The result of the directors' legal analysis and their articulated reluctance
was pressure on Director Clement to accommodate the reluctant by withdrawing
her resolution, and she did so. The Fuelberg directive remains on the
As to what force it may now have, consider the language of the Purchasing
Policy passed earlier in the meeting. There, the status of previous
policies is addressed (my emphasis):
Once published and made available on the Intranet for use Cooperative wide,
the requirements herein supersede and replace all previous policies. All
unwritten policies and procedures will be considered non-standard and
Though it is a bit awkward to say that requirements supersede and replace
policies, rather than requirements, one can safely assume, I think, that
once the requisite conditions are met, the requirements of previous
purchasing policies and procedures are superseded.
Unfortunately, there is no such language in the section of the policy
dealing with exceptions. Previous exceptions are not addressed in any
And of course if an exception already exists, as it clearly does in this
case, having been established by a former general manager, Bennie Fuelberg,
in 2002, with a directive to the Purchasing Department, and having been
honored ever since, it can be argued that there is no need for anyone, now,
to request another exception for the same items.
If someone were to want a new exception, obviously a request would have to
be made, justified, and submitted. But here we have an existing exception
to this policy adopted in 2000, an exception dating from 2002, an exception
the Board has now declined to rescind.
Worse yet, we have directors, and even an assistant general manager,
extolling the values of the sole-source arrangement with TEC.
Had the Fuelberg directive truly been "moot," in the narrow and specific
sense of having "no practical value," we would not have witnessed the
display of reluctance to rescind it.
It is obvious that the lobbyists at and for TEC have been making their case,
and it is equally obvious that our folks have been listening with attentive
ears. I dare say that managers and directors from other cooperatives, the
beneficiaries of our buying power at TEC, have chimed in as well.
The Board ought to put this rescission resolution back on the agenda for the
October meeting, and it ought to disentangle itself, and our cooperative,
from the TEC operation.
22 September 2010
PEDERNALES ELECTRIC COOPERATIVE, INC.
BOARD ADOPTED: October 23, 2000, Effective: November 1, 2000
AMENDMENT: September 20, 2010
B. Exceptions to Competitive Bidding
Requests for exceptions to the competitive bidding process must be justified
in writing and submitted to the General Manager for approval. Approved
requests shall be forwarded to the Purchasing Section, who will file the
documentation as part of the purchase record.
H. Policy Requirements
The Purchasing Section will maintain up-to-date written policy and
procedures, revising them as necessary. Once published and made available on
the Intranet for use Cooperative wide, the requirements herein supersede and
replace all previous policies. All unwritten policies and procedures will be
considered non-standard and unauthorized. [my emphasis]
[from the Navigant Report] 8. Purchases from Texas Electric Cooperatives,
In May 2002, the Board authorized the Cooperative to "purchase materials
from Texas Electric Cooperative US&S whenever available, without going
through the bid process."603 Subsequent to the Board meeting and resolution,
Mr. Fuelberg instructed the purchasing Department to "purchase construction
materials from US&S without bidding in a manner similar to the way we
purchase poles from the pole plant. If our specified materials are available
through US&S in a timely fashion, we will purchase them from them. If at any
time their prices, availability or delivery schedules become a problem, we
will acquire materials from other vendors. Please notify me when this
occurs. Keep me informed of the progress of this process."604 [my emphasis]
In February 2005, the Board resolved "that the Cooperative will purchase all
transformers, wire, and cable from TEC US&S for at least six months."605
603 Minutes of Meeting of Board of Directors, Pedernales Electric
Cooperative, Inc., May 20, 2002.
604 May 28, 2002 Letter from Bennie Fuelberg to Mike Elder Re: Purchasing of
605 Minutes of Meeting of Board of Directors, Pedernales Electric
Cooperative, Inc., February 21, 2005.
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