Cobb EMC in 2012 – Progress Being Made But Big Challenges Remain

12 Sep

Coming up on Saturday, September 15th is a huge event for the Membership of Cobb EMC, the first Annual Membership meeting not mandated by court order since 2007. A major re-write of the bylaws is being proposed by the new Board of Directors and two additional modifications are being proposed by one of your fellow members, Paul Chellis.

July 26th Town Hall Meeting Recap

Leading up to the Annual Membership meeting, The Cobb EMC Board held a Town Hall meeting on July 26 of this year. Starting off the meeting was a presentation by Board Chairman Ed Crowell with input also being provided by several Board members. The floor was then opened to Member questions and several well reasoned and pertinent questions were raised. Some key takeaways from the Town Hall meeting for me were:

  • The Board was working on a bylaw re-write to be presented for vote at the upcoming annual meeting to include provisions for open board meetings, term limits, and mail in voting,
  • Work was forging ahead on the Request for Proposals (RFP) for capacity and energy and in excess of 70 viable bids have been received. Economics appear very favorable and justify the recent decision by our new Board of Directors to withdraw from the expensive boondoggle known as Plant Washington (aka Power4Georgians),
  • Cobb EMC expects that the aforementioned RFP will enable it to cut its ties to Energy Consulting Group (ECG), as well as Cooperative Energy Incorporated (CEI) who are currently providing Cobb EMC with Energy Management Services on a “no bid” basis, and
  • Cobb EMC is cutting its formerly expensive and questionable relationship with J. W. Rayder and allowing his contract reimbursing him up to $30,000/month to expire.

The overall tone of the meeting was open and congenial and yours truly was very encouraged that the new Board of Directors has made real progress in their inaugural year. The Town Hall meeting itself was an excellent example of our new Board of Directors reaching out to the Membership.

Re-write of the Bylaws and EMC Member Amendments – Vote Yes

The Town Hall meeting notwithstanding, there are several things that are unsettling. The board has performed what is essentially a complete re-write of the bylaws. The schedule upon which they have undertaken this has left no room for a Member comment period, so we are left with the choice of an up or down vote on the complete package on September 15th. The bylaws have only been recently made available so there has really been little time for anyone to review the content in detail. My read of the new bylaws is that we should vote for them primarily because of the mail-in voting and open meeting provisions. However, as I stated above, one of your fellow EMC members, Paul Chellis, has submitted two additional amendments to the bylaws that I strongly urge everyone to vote for.

One is a modification to the Board proposed 4 term (or 12 year) limit. Paul’s amendment calls for a three term (or 9 year) limit, with the caveat that if a former Director leaves for a term, he or she may then run in the following election three years later. I believe a three term limit is more reasonable particularly when we think back on the result of an entrenched board and how difficult it has been for Members to regain control of our EMC. The primary argument that the Director job is “too difficult to learn” to impose a 9 year limit is a little silly when one compares their job to that of the President of the United States. Last I checked that job has an eight year limit.

Paul’s second amendment provides for something many of us have complained about: the ability to give a written proxy to another Member if you cannot make a voting meeting. Paul’s amendment allows you to do that. It also contains a protection against the EMC collecting proxies to entrench incumbent Directors by preventing employees or directors of the EMC from receiving a proxy. Mr. Crowell, our Chairman, has gone on record saying that proxies impose a risk of a special interest group collecting proxies to swing an election. I believe this is disingenuous given that the Board’s draft of the bylaws already contains a provision for proxies by commercial and industrial customers (without any restriction on those proxies being held and voted by incumbent Directors). The Board has also contended that proxies aren’t necessary because of the mail in voting provision in the new bylaws. This argument also falls short because the new bylaws only specify mail in voting for Director elections. The new bylaws still provide broad leeway for other matters to be considered only in the context of a Member Meeting where one must attend to vote. We need proxies to assure our voice is heard in matters concerning our EMC.

Other Concerns

The last several years saw significant erosion of our rights to participate in decisions made at our Member owned EMC. The new Board of Directors that we fought so hard to elect has made real progress to restore some of those rights, but still they need to remember why they were elected. Bylaw re-writes, even with some good enhancements, should have significant opportunity for Member participation and comment and this has definitely not occurred.

While I am recommending that we approve the new bylaws, the new bylaws do have several flaws that will need to be addressed over time (and these have only been identified with a very short review time; I am not aware of any Member that has been able to make a detailed comparison to the previous bylaws in the time we have had thus far). For one, the open meetings provision is very watered down when compared to the one approved at the Pedernales Electric Cooperative in Texas after they went through a series of problems very similar to our own. In a story that will sound familiar to Cobb EMC Members, Pedernales General Manager Bennie Fuelberg was convicted of third- degree felony theft of co-op funds, money laundering and misappropriation of fiduciary

property. In light of a similar fiasco at our EMC, many Members feel that the Pedernales bylaw revisions should have been more heartily endorsed by our new Board of Directors.

A second flaw in the re-write concerns a provision hastily included in the February 2010 set of bylaw changes made by the old Board of Directors while they were in the midst of damage control and the appeals battle with the plaintiffs in the derivative litigation lawsuit. This change required a 70 to 100 day lead time to submit proposed changes to bylaws prior to an annual meeting. Since 1938, Members had been able to make proposals from the floor at the Annual Member meeting that would be voted on immediately. According to the plaintiff’s legal filings, this right is part of the enabling legislation for EMCs. The new re-write extends the restrictions on Member proposals even further, requiring a full 100 days lead time and 35 Member signatures on any Member sponsored bylaw change. While Members may gain the floor and request a vote on a Member proposal, no such vote is binding unless the proposal is submitted with the appropriate hundred day lead time. These provisions will make it significantly more difficult to make further progress at our EMC.

Let’s vote yes on the new bylaws, and definitely vote yes on the Paul Chellis amendments. But we need to maintain vigilance and be aware that we need some significant additional bylaw changes to be ratified at the 2013 Member meeting.

Mark A. Hackett
A Cobb EMC Member

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