10.30.09
PEC Board Holds Special Meeting; Votes to Spend $300,000 To Make Members Feel Like Members – Updated
A special meeting of the Pedernales Electric Cooperative was held on Friday, October 30, 2009 to vote on an amendment to the distribution of capital credits to members. The amendment presented was to distribute all capital credits of $1.01 or more via live check rather than as a credit on the member’s November bill.
Please continue reading to find out how much that $1.01 check is going to cost PEC members, and why some members think the board may have violated the open meetings act.
$1.50 to Mail a $1.01 Check
General Manager Juan Garza stated that the cost of mailing each check is $1.50 and there would be around 200,000 checks mailed, for an approximate total cost of $300,000. “Disbursing checks shows members that they are members,” stated Garza. The cost of the estimated $300,000 will be paid for by the members of PEC. Already, those wishing to become PEC members must first pay a $50 membership fee and a non-refundable $75 establishment fee when they sign up for PEC service.
As a result of this decision, a PEC member who is due a capital credit refund of $1.01 or more will receive a check that cost $1.50 to mail. This same member can then use their car and gas and drive to the bank and deposit it, rather than having their November electric bill reduced by the exact same amount of the check. There will also be a 16 day delay in distribution of the capital credits due to this change in disbursement methods.
When asked if members had been complaining about the disbursement method, Garza stated that the cooperative had received 6,227 calls about capital credits from members. However, those calls were “mostly requesting clarification,” he stated, and not complaints about the method of distribution.
Garza stated that he supported disbursement via live check because “by taking this action the board is signaling its desire to communicate better.” However, in earlier member comments, one PEC member encouraged the Board to cut advertising costs since the cooperative currently has approximately $600 million dollars in debt. PEC Communications Director Michael Racis stated that PEC spent approximately $400,000 annually in media advertising. District 1 Board Member James Williams stated that the $300,000 cost of mailing checks in an attempt to communicate better is almost equal to the entire PEC annual advertising budget.
Six members were in attendance at Friday’s meeting. District 2 Director Kathy Scanlon was not present. The Board voted 5-1 to change the capital credit disbursement from a billing credit to the more expensive mailed check method.
$300,000 Vote Followed by Display of Pomp and Circumstance
Immediately after the vote, Garza read from a prepared speech stating “I commend the board on this decision,” and “we are trying to give our members tangible evidence” of their role as members of the cooperative. Board President Larry Landaker had arranged for two Marble Falls members to be in attendance so he could present them with a big fake check printed in color and mounted on board (much like you see in a Publisher’s Clearing House commercial) for $33.03…the amount of their capital credit.
PEC operates its Board meetings under an open meetings policy and has recently made strides towards greater openness and transparency. However the pre-prepared speeches and actions at Friday’s Board meeting appears to indicate that the Board’s decision to change its capital credit disbursement method may have been decided in advance and outside of open meeting guidelines. Previous legal cases have determined that a board that uses its formal meetings to merely ratify decisions made in private is in violation of the Texas Open Meetings Act.
PEC’s Open Meetings policy can be downloaded at: http://pec.coop/CorpProfile/OpenMeetings.aspx
You can obtain more information about the Texas Open Meetings Act at: http://www.oag.state.tx.us
PEC’s policy on capital credits, prior to Friday’s Board meeting, can be downloaded at: http://pec.coop/CorpProfile/CapitalCredits.aspx
The decision of the PEC Board at the October 30, 2009 Special Board Meeting cost PEC members not just $300,000 in postage, but another $4,500 as each PEC Board member is paid $750 per Board meeting.
The October 30, 2009 PEC Board meeting was live streamed via the internet. Once it is posted it can be viewed at: http://pec.coop/CorpProfile/BoardVideos.aspx
[UPDATE]: Link to the PEC press release on yesterday’s action, PEC Board votes to distribute capital credit checks.
The voting record of PEC Directors with Williamson County territory:
District 1: Cristi Clement (cristi.clement@peci.com)
Voted YES to amend the disbursement of capital credits to live mailed checks.
District 2: James Williams (james.williams@peci.com)
Voted NO to amend the disbursement of capital credits to live mailed checks.
District 3: Kathy Scanlon (kathryn.scanlon@peci.com)
Not present.
The voting record of non-Williamson County PEC Directors:
District 4: O.C. Harmon (o.c.harmon@peci.com)
Voted YES to amend the disbursement of capital credits to live mailed checks.
District 5: R.B. Felps (r.b.felps@peci.com)
Voted YES to amend the disbursement of capital credits to live mailed checks.
District 6: Larry Landaker (larry.landaker@peci.com)
Voted YES to amend the disbursement of capital credits to live mailed checks.
District 7: Patrick Cox (patrick.cox@peci.com)
Voted YES to amend the disbursement of capital credits to live mailed checks.
(In the interest of fairness, anyone wishing to offer different opinion or share their thoughts on the PEC, feel free to email editor@eyeonwilliamson.org.)