Small Town News

Co-op approves sweeping changes

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With the last of the "old guard" members finally off the board of the Pedernales Electric Cooperative, the new directors unanimously approved a sweeping set of bylaw revisions last weekin the nation's largest electric cooperative. The new rules establish term limits for directors, eliminate paid advisory director positions, give members more authority to remove board members from office and include an anti-takeover clause.

"This is an important and historic day," said PEC Board President Larry Landaker. "These bylaws [were] considered by a fairly elected Board of Directors, and the process has been fully open and transparent from start to finish."

PEC leaders say the revisions are the latest sign of progress and reform in a cooperative that has been plagued by scandal for the last three years. Former General Manager Bennie Fuelberg and former co-op counsel Walter De-mond are preparing to face trial on charges of money laundering, theft of property in excess of $200,000 and misapplication of fiduciary duty in excess of $200,000.

In the last three co-op board elections, members running as reform candidates have ousted incumbents who served during the Fuelberg era.

The board attempted to push through a similar bylaw revision this February, but narrowly missed the necessary two-thirds majority. The last two remaining old guard members, R.B. Felps and O.C. Harmon, voted against the bylaw revisions, while newly elected member James Williams abstained.

The bylaw reforms approved on Nov. 15 will establish a four-term limit for directors, with each term lasting three years, though former directors could seek office again after taking a three-year break.

Previously, directors could serve indefinitely. At the start of the PEC shake-up in 2007, several directors had served on the board for almost four straight decades.

The revisions also eliminate the paid advisory director positions, which have sat empty since this summer. Previously, advisory directors earned about $30,000 annually for their non-voting role on the board. PEC directors may still appoint volunteer advisory committees.

Co-op member-owners also gained more authority to boot out directors. Previous co-op bylaws only allowed removal from office for specific instances of director malfeasance, and required 25 percent of co-op members, or about 50,000 individuals, to sign a petition calling for the removal, prior to a vote of the full membership. Underthenewrevisions, signatures are only needed from ten percent of members. In addition, a separate disqualification process was added for directors who become out of compliance with qualifications for serving during their terms

A final provision of the bylaw reforms includes an anti-takeover clause preventing the board from approving a dissolution or sale of PEC assets if the terms would disproportionally benefit any co-op director or employee.

"The new bylaws will protect the financial interests of the individual members of the Cooperative and provide the rules, processes and organizational structure to strengthen and preserve PEC's proud cooperative heritage," said PEC Director Patrick Cox, who represents Hays County. "The bylaws ensure that the Cooperative will adhere to ethical standards and best practices."



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© 2010 The Free Press Buda, Texas. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

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