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Opinion
By Linda Kaye Rogers
It seems the lawsuit settlement is going to remain foremost in the minds of PEC members for a while longer. There are currently two prevailing sets of thinking about the lawsuit and the proposed settlement. One is “that's life, let’s get on with the business,” coming mostly from the defendants in the suit. The second is the feeling that the guys who caused the problems may get off scot-free.
I certainly do get an earful, as I am out and about talking with PEC member/customers.
There seems to be universal agreement that PEC provides good service, but it is not without its problems. Two Wimberley members recently shared their stories about unexplained extra charges. One said he received almost a full year of charges when his meter was changed, and he was in the process of moving out of that location. No one at PEC could or would explain the large bill. He was forced to pay or lose service to his business. The other local member decided to move his lines underground and was charged a new meter fee, but had no new meter. Members further north have complained about inconsistent power flow, but have received no answers to their complaints.
These are just a few examples, and it goes to show that no business is perfect. Overall, there is a strong consensus that we enjoy outstanding service from PEC's rank-and-file employees.
Most dissatisfaction expressed thus far is a response to the results of on-going investigations of PEC's internal dealings, and the disposition of those results. We are about to hear Austin District Judge Deitz’s ruling on the fairness of the proposed settlement which exonerates the very guys who caused the problems.
Most members say they want a delay in a settlement ruling, pending the Navigant investigation/audit of PEC. It now seems like we are being asked to sign a blank check without realizing the full extent of the damage. With so much information of mismanagement already disclosed, it’s tough to see anything “fair” about the current settlement proposal. Members are very alert to this fact. Members want to know “all there is to know” before agreeing to anything.
If Judge Dietz rules to delay the agreement and additional wrong-doing is uncovered, it will add more fuel to the fire.
Many members also feel that ALL current Board members should resign. I can tell you from reliable sources, that this is not going to happen. Nor are we likely to get an apology from any of them. The exception here is E. B. Price, who has already acknowledged errors and apologized. He will be retiring from the PEC Board in June.
I have made two requests to the Board for an apology. Paul Langston, a candidate for the District 5 member/advisory director seat, made a public appeal for an apology at PEC's April 21 Board meeting. I dittoed his statement and can tell you that both of us were met with steely stares. The Directors apparently feel they have done no wrong and there is no need to apologize. The meeting was taped and is available for viewing on the pec.coop website.
I agree with the opinions of most of my fellow members. It's just flat wrong when there is hard evidence that mismanagement has occurred and the wrong-doers express no remorse or regret and continue the charade by clinging to their seats on the Board. I am now more resolved than ever to act for change. As a candidate for PEC's District 7 board position, my pledge is to always be a member first and foremost.
Linda Kaye Rogers grew up on a small family farm in the Rio Grande Valley. She received her BA and Masters of Science in Social Work from UT Arlington. She has taught smoking cessation, communication skills, stress management and parenting in hospitals, corporations, community groups and churches. Linda Kaye moved to Wimberley in 2000 where she built a straw-bale cottage and immediately established a rainwater collection system as her water supply. That same year she began volunteering at the Katherine Anne Porter School and has worked in various capacities at the school. She is an avid organic gardener, animal lover, conservationist, and environmentalist. In 2005 she spearheaded efforts to defeat a road bond that would have benefited a developer and cost Woodcreek North residents a dramatic and 20-year tax increase. Linda Kaye is a member of PEC4u, the group of PEC members who initiated the investigation of PEC Board governance and practice.
OpinionBy Linda Kaye RogersThere's plenty of injustice in the lawsuit settlement with the PEC now being weighed by members. But the class action lawsuit brought against PEC last year has already accomplished many of its goals. Members are now enjoying some of these changes.
Issues of transparency
Board meetings are now announced and posted three days in advance on the PEC Website. The agenda is also posted. Members may attend the meetings and address the Board and expect full disclosure (when appropriate).The actual meetings are being taped and made available at the PEC.coop website. The website itself has expanded and offers more insight into the co-op and it’s activities. Records have been opened, such as reports of compensation. An investigation/audit is underway and additional records will be available. The purchase price and continued costs of the subsidiary ENVISION is now available. Full disclosure regarding all aspects of ENVISION will be available to members.
Compensation
As part of the NAVIGANT audit/investigation, compensation to Directors and other Board members is being brought into line with other co-ops. This amount will be retro-active to March 2008. A committee has already been formed within PEC to survey national per diem rates and these are effective immediately. These will be almost identical to government per diem standards. The “Director Emeritus” compensation has been discontinued.
Resignations
GM Bennie Fuelberg, Asst. GM. Will Dahmann, and Board President W.W. Bud Burnett have all resigned. (The lawsuit asked for the resignation of ALL Members of the Board. This has not occurred.)
Audit of records
Although a more extensive audit was desired, records for the past 10 years will be Investigated. PEC has hired NAVIGANT for the audit and this has been approved by the judge and state Senator Troy Fraser, chairman of the Senate Business and Committee. The senate committee and the State Auditor will oversee and review the the investigation. The State Auditor's Office was unavailable for several months and the audit needed to commence immediately. It is hoped that there will be a preliminary report by the time of the annual meeting in June. It will include a full audit of ENVISION.
Return of Patronage Capital
Members are beginning to see their annual credit on their bills. Although it seems a small sum compared to the whole, it is a sum that does not jeopardize theoperations of the co-op. And while it may not be the fairest dissemination, it is happening.
Board Elections
For the first time in the history of the co-op, real elections are about to happen! Members will no longer receive a proxy, but a full ballot of candidates for election. The election is being managed by an outside source and PEC has no oversight or input into the process or results, beyond the initial by-law requirements. No more “ drawings” to bribe members into returning their proxies or attend the annual meeting. All members are encouraged to vote. Your presence at the annual meeting is still vital, and it is equally important that you VOTE by returning your ballot, vote online, or in person at the annual meeting.
While many aspects of the lawsuit are slipping through the cracks, it is important to recognize its accomplishments. The Plaintiffs were courageous to pursue this. As a member, I am very grateful for all that has been achieved. Finally, our wonderful co-op now appears to be truly operating within the principles of a co-op.
It only took 70 years.
Linda Kaye Rogers grew up on a small family farm in the Rio Grande Valley. She received her BA and Masters of Science in Social Work from UT Arlington. She has taught smoking cessation, communication skills, stress management and parenting in hospitals, corporations, community groups and churches. Linda Kaye moved to Wimberley in 2000 where she built a straw-bale cottage and immediately established a rainwater collection system as her water supply. That same year she began volunteering at the Katherine Anne Porter School and has worked in various capacities at the school. She is an avid organic gardener, animal lover, conservationist, and environmentalist. In 2005 she spearheaded efforts to defeat a road bond that would have benefited a developer and cost Woodcreek North residents a dramatic and 20-year tax increase. Linda Kaye is a member of PEC4u, the group of PEC members who initiated the investigation of PEC Board governance and practice.
Drippings Springs: Friend of trees? 
It was a great disappointment to read the following item about the new Walgreen’s slated for Dripping Springs. "The city has agreed to let Walgreen’s remove many of the 100-plus year old oak trees on the property so the project can move forward."
The quote comes from Realtor Steve Mallett’s website, and since he seems to be generally accurate, I’m writing this on the assumption that the City made such an agreement.
Do we need a Walgreen’s here? Well, many folks will say that we do. So it seems pointless to question whether the chain stores will ever bring their brand of retailing to Dripping Springs; it’s happening now. But in the process, it does seem a bit "backward thinking" to permit this progress to destroy the very beauty that makes the town unique.
Does Walgreen’s absolutely have to destroy the trees in order to build the store? I don’t think so. I’ve looked at that corner (US-290 at Ranch Road 12) very recently . . . . I even drove around the block to see how the store could be placed in order to minimize the destruction. Apparently, the Walgreen’s Corporation didn’t see the corner the way I did.
In my mind, I saw a polite and unique Walgreen’s surrounded and shaded by hundred-year-old trees, a welcoming spot that provided some cool parking spaces for our blisteringly hot summer days. And I saw a store that respected the surroundings in which it had placed its business. And because it had done so, I saw a store brimming with shoppers because of its desire to fit into the town instead of trying to remake the town to fit its corporate headquarters’ demands for uniformity and blandness. We’re probably not going to get that Walgreen’s.
I don’t know about you, but when I drive through Austin (and most every other town in the US), I literally cannot tell the difference between a Walgreen’s and a CVS; apparently, they both use the same architect. Their desire to shout "drugstore!" has worked so well that together, they have homogenized the concept and made each other indistinguishable and unremarkable. Today, if I need something from a drugstore, it matters little whether I am in a Walgreen’s or a CVS. Both stock the same items, so there is no reason for me to be loyal to either.
While I’ve long expected the chain stores to begin their invasion of Dripping Springs, it has occurred faster than I thought it would. One thing about it has disappointed me: I really believed that our City Council, our Chamber of Commerce, and the town’s leadership would exert tremendous pressure on these corporations to abandon for once their insistence on stamping our city with the same mold used everywhere else. I guess I was just foolish for thinking Dripping Springs would be different. So, before a whole lot longer, we should look for CVS to announce its intention to locate within a stone’s throw of the Walgreen’s, and, except for the sign, you won’t be able to tell them apart.
Mind you, I have nothing against either company other than their juggernaut approach to uprooting every tree in their path. Eventually, they will merge, and the country will be left with thousands of look-alike buildings facing each other . . . . but half of them will stand on empty, treeless slabs of concrete. In the meantime, we lose our trees, and, by the way, a lovely hundred-year-old building that caring could have saved.
Michael E. McGown has lived in Sunset Canyon for the last six years and recently completed a term of service with the Hays County Comprehensive Planning Commission.
OpinionBy Linda Kaye RogersAs with most settlements of any kind, there is a compromise involved. The proposed PEC settlement is no different. And, as is usual, the compromise does not make everyone happy.
The portion of this settlement that requires the most "give" by members is the member payment of $1.4 million in addition to releasing the Defendants from any responsibility. The settlement calls for $4 million to pay legal fees, court costs and "bonuses" to the Plaintiffs. The bonuses will be a sum paid to the Plaintiffs for their time and energy. Plaintiffs are not pressing for this and it is expected to be a very small portion of the $4 million.
PEC's insurance carrier, AIG, has agreed to pay for $2.6 million, leaving the balance of $1.4 million. Members will wind up paying this amount in one form or another, not the management of PEC, the Directors, or Advisory Directors, who were named as the Defendants in the lawsuit.
Then there is the gauling additional agreement that members will not pursue any future legal action against the named Defendants. This is standard procedure when an insurance settlement is made, and this is an insurance settlement. It means that no member can bring another civil suit with the same charges. This is like double jeopardy. Now, this clause covers only up to the date of the proposed settlement, March 10, 2008. If any named Defendant commits a further "error or omission" after this date, suit can be filed.
While the judge could order Defendants to pay the $1.4 million, it would be a very dangerous move. It would set precedence where no sitting board member of any kind would be immune from personal liability. No one would want to serve on a board if they could be sued personally. This is the purpose of the liability insurance.
All this said, this is probably the best deal we members are going to get. Discussions with attorneys, John Warrall, a primary Plaintiff in the lawsuit, PEC General Manager Juan Garza and others with experience in such matters, indicate we stand to lose a great deal more if we (PEC member/customers) reject the proposed settlement and go to trial. First is the fact that it would take several years for a trial to run its course. Even if the Plaintiffs in the class action case were to win, the case could be appealed, so add another four to five years. Historically in Texas, cases such as these are most often lost by the plaintiffs.
Is it fair? Not by my reckoning. State Senator Troy Fraser of Marble Falls, a PEC member, has stated he sees nothing fair about it. I'm spitting fire, but all things considered we may just have to swallow this bitter pill and hope that some good comes from it. I will be writing my letter of objection regarding this proposed settlement. I will state that while I DO NOT see this as fair, I acknowledge that is seems to be a no-win situation for the members and I will accept it as the lesser of possibly worse options. There still remains the possibility that criminal charges could be filed from an ongoing investigation by the Llano County D.A., and a state Senate investigation is not yet complete. For those believers in "final judgments," there still may be some guarantee of satisfaction.
Linda Kaye Rogers grew up on a small family farm in the Rio Grande Valley. She received her BA and Masters of Science in Social Work from UT Arlington. She has taught smoking cessation, communication skills, stress management and parenting in hospitals, corporations, community groups and churches. Linda Kaye moved to Wimberley in 2000 where she built a straw-bale cottage and immediately established a rainwater collection system as her water supply. That same year she began volunteering at the Katherine Anne Porter School and has worked in various capacities at the school. She is an avid organic gardener, animal lover, conservationist, and environmentalist. In 2005 she spearheaded efforts to defeat a road bond that would have benefited a developer and cost Woodcreek North residents a dramatic and 20-year tax increase. Linda Kaye is a member of PEC4u, the group of PEC members who initiated the investigation of PEC Board governance and practice.
Opinion
By Charles O'Dell, PhD
Last Thursday, April 17, 300-plus citizens met in the Wimberley Civic Center and for three intense hours vented their anger over secret True Ranch Development Agreement negotiations that alert citizens exposed. Pct. 3 Commissioner Will Conley reacted with a mixture of pugnacity and conciliatory responses, even lapsing into a campaign speech. The next day developer Russell Hinds (Rincon Group) of Austin pulled the plug on negotiations with county officials.There are many lessons to take away from the True Ranch experience, but the two most important are these:Citizens united can derail back room deals by elected officials.Public officials who work in secrecy are up to no good.As far as I can tell, Hays County Commissioners’ Court has a long history of some court members catering to special interests and operating in conjunction with the good old boy network. Special interests are easy to spot through their county contracts and their election campaign contributions. Secret negotiations should be a red flag for responsible developers.The True Ranch developer was wise to withdraw from the county agreement negotiations after hearing the community express its concerns, opposition and offering sensible suggestions for his proposed project. The developer, Hinds, seemed to clearly recognize the community anger directed primarily toward their elected official who has a history of mucking up projects. Better to return to the drawing board and involve the community up front the next time. And, there will be a next time.Commissioner Conley’s political style fits well with our Hays County good old boy partnership with elected officials. We’ve seen that partnership style before in Conley’s effort to make RR 12 into a super highway last year, and in the $1.6 million giveaway of our parks bond money for a Precinct 1 special interest road planned to be in the city limits of San Marcos. This time secrecy got a developer into trouble with the community.Another Conley special interest project is the Precinct 1 FM 110 road that will benefit special interests who are Conley campaign contributors. Voters turned down the $172 million road bond last year featuring RR 12 in Pct. 3 and FM 110, but Conley and Pct. 2 Commissioner Jeff Barton won’t take “no” from the voters for their special interest road projects.True Ranch is just one more example of the Conley’s development strategy for Pct. 3 and beyond. Build big roads and development will come, or approve dense development to justify big roads.An ample dose of citizen Roundup (tm) sprayed on those elected officials who pander to special interests will remove the facilitators for the good old boys. This is the root cause of our problems in Hays County.Counties need more authority to achieve responsible growth, but first the limited authority we have must be used responsibly by our elected officials. Until that happens citizens throughout Hays County must do what they did for True Ranch: come together and say “no” when our community interests are threatened by back room deals and secret negotiations.Active citizens are the heart and soul of a functioning democracy that keeps elected officials working solely in the public interests.As co-founder of Hays Community Action Network (HaysCAN) in 2003, Mr. O’Dell strives to carry out the mission of ensuring open, accessible and accountable government. He is a long time and close observer of the workings of the Hays County Commissioners Court. He earned a degree in Agricultural Education and a Masters in Ag Economics at Texas Tech, and, later, a Ph.D. at The University of Maryland while employed as a Research Economist with the U.S. Department of Agriculture (USDA) in Washington, D.C. Texas born and raised on a family farm, O’Dell is a Hays County Master Naturalist and a board member of the Ethical Society of Austin.
The RoundUp received word from a county official late Friday afternoon that the True Ranch developers had pulled their preliminary plan/plat and developer's agreement from the county on Friday. No additional information was made available.
By Bob Ochoa
RoundUp Editor
More than 300 citizens from Wimberley and environs gathered at the community center last Thursday for a lively give and take with county officials over the proposed True Ranch project.Lying just a few miles west of Wimberley fronting RR2325 and Fischer Store Rd., the proposed 675-acre, 438-home subdivision, has drawn the ire of local residents concerned with the impact the subdivision could have on the region's groundwater supply, traffic and property taxes.One speaker asked county officials if they were prepared to handle 900 additional vehicles on area roads that the subdivision would bring.Developer Russell Hinds (Rincon Group) of Austin said his subdivision's effects would be minimized by a phased construction plan lasting up to ten years. True Ranch, he said, was planned to preserve the land's natural resources and special character.Wimberley Valley Watershed Association president Patrick Cox said he strongly opposed the subdivision because it lies within a critical groundwater recharge area of the Trinity Aquifer that helps maintain the flow of Jacob's Well and Cypress Creek.Jim McMeans, a leader in a petition drive opposing the development, fired off a volley of concerns. The audience answered with cheers and loud applause. "I'm motivated," he said, "to send a message to irresponsible developers that they will not be accepted in this community."McMeans said he was angry "over the lack of county control" and "the apparent secrecy with which this project was formulated. I am angry about the creation of a municipal utility district on the premise it would bring surface water to the project and eliminate the need for groundwater, however, the developer has no contract for surface water."McMeans said elected officials at all levels should know that the Wimberley Valley and surrounding area "want to maintain low density development . . . that respects the Trinity Aquifer which supplies all our needs and recharges our springs, creeks and the Blanco River."The town hall style meeting was hosted by Pct. 3 County Commissioner Will Conley. He brought along officials of the county's subdivision office and county special counsel Mark Kennedy for an update on the administrative status of the subdivision.Conley said of the meeting, "I thought we had a mixture of people who wanted to listen and get informed on the issues. We had some who had good comments and suggestions to take back to the negotiating table. Some people just wanted to be heard."
He added, "Nothing can ever completely satisfy 100 percent of the community but we will do the best we can in protecting our enviornment . . . It sounds like the community would support very little right now."The county, Conley and the developer are working on a development agreement to address community concerns over the proposed development. Any agreement reached must be approved by a vote of the commissioners court. Conley pointed out a development agreement is not required by county subdivision rules. "He (Hinds) has come to the table with us to have these discussions (voluntarily)."Conley said he will meet with Hinds next week to discuss adding more provisions in the draft development agreement, including one or two ideas taken from citizens' comments.
OpinionBy Charles O'Dell, PhDNews media in Hays County damage our democracy when they deliberately publish false information or fail to check for accuracy.Case in point is the April 9, 2008 editorial by Bill Peterson, publisher of The Hays Highway.com, and former editor of the Hays Free Press. In his Nick Ramus vs. Hays County editorial, Peterson could have easily discovered the truth with a little research, as we did. Instead, he simply spouted political propaganda from the Hays Free Press.Nick Ramus never owned or operated a restaurant as Peterson claims. Ramus was a cook at Southwest Texas State until he was fired in 2000. His only stable job since moving to Texas in 1981 was as a cook at Southwest Texas State, and he sued his employer for racial and age bias after claiming disability and being fired.The two acres where Ramus lives in a mobile home with a 1,500 gallon residential septic tank was purchased from Robert Bowden in 1989. On March 14, 2002 Hays County Environmental Health Department issued a violation citation: “Septic system is surfacing. It has been altered or it has failed.”The citation also noted: “There is no building permit or septic permit issued for the site.”It was Ramus’ residential septic system and a structure he had built that the Appraisal District taxed as a shed. Ramus was given seven days to repair the system and obtain the required septic and building permits.Septic system permit applications filed after 1997, must comply with all state health and safety rules adopted by Hays County in 1997. In 2002, Ramus applied for a permit to install a commercial septic system on his two acres to serve a proposed eating establishment (the shed). There is only enough room on two acres for a functional residential septic system, but not a commercial septic system.Peterson claims that Ramus fought the county for years over his commercial septic permit. When Ramus applied to install a large commercial septic system he should have been denied but he wasn’t. His proposed food establishment and commercial septic system require 24 acres under the 1997 rules. Peterson could have discovered this had he read the Hays County On-Site Septic Facility (OSSF) Rules as we did.Despite numerous violations of our state health and safety code, Tom Pope permitted the Ramus commercial system on September 1, 2006 (not in 2005 as Peterson asserts), and then revoked the permit January 18, 2007 when some of the major septic system violations were made public. Commissioners’ court affirmed that action by revoking the Ramus permit on April 17, 2007.San Marcos-based Pct. 1 Commissioner Debbie Ingalsbe had been dealing with the Ramus property as a pubic nuisance for years (Ramus was convicted as a public nuisance in 2005), and Judge Sumter and Commissioner Ford voted with Ingalsbe because the additional commercial septic system is a major health and safety threat to the environment and water quality.Ramus argued his 2005 commercial septic system was grandfathered under the 1984 rules, but there is no legal basis for grandfathering a new septic system, only one that existed prior to a change in the rules. Bowden’s 1978 residential septic system (now used by Ramus) is allowed so long as it is kept in good order. Ramus still doesn’t have a valid residential septic permit and many believe his residence is connected to the commercial septic system in violation of law and a district court agreement.Peterson is wrong again when he reports that Florinda Martinez is a constituent of Pct 2 Commissioner Jeff Barton. Martinez lives on property located in Pct. 1 and was denied a septic permit years ago because her one acre lot is not platted, just as the Ramus two acre lot is not platted. As with the Ramus residential septic system, a neighbor of Martinez complained about raw sewage running on the ground creating a health and safety problem and a public nuisance (odor). Barton’s political mischief has backfired on him, yet Peterson reports myth as fact.As for the 2008 election, why should voters punish Commissioner Ingalsbe for voting to prohibit a public health and safety threat that violates state health and safety laws, or for voting to appeal a district judge’s absurd recent ruling (in Ramus’ lawsuit against the county) that tells all Texas counties they cannot enforce state laws to protect the public health and safety?A convicted public nuisance may be running for public office to achieve warped political purposes (Ramus is Ingalsbe’s Republican challenger for the Precinct 1 commissioner seat), but voters are not likely to confuse that with real public health and safety issues the majority court members are addressing. Peterson does our democracy no favor by spouting political propaganda and misinformation.As co-founder of Hays Community Action Network (HaysCAN) in 2003, Mr. O’Dell strives to carry out the mission of ensuring open, accessible and accountable government. He is a long time and close observer of the workings of the Hays County Commissioners Court. He earned a degree in Agricultural Education and a Masters in Ag Economics at Texas Tech, and, later, a Ph.D. at The University of Maryland while employed as a Research Economist with the U.S. Department of Agriculture (USDA) in Washington, D.C. Texas born and raised on a family farm, O’Dell is a Hays County Master Naturalist and a board member of the Ethical Society of Austin.
Opinion
By Linda Kaye Rogers
PEC members have received a letter outlining the settlement reached by the PEC Board of Directors and the plaintiffs in a class action lawsuit. Many members are feeling it is a fine example of the wheels of justice going flat and a checkered flag for the named Defendants to run all red lights with a get out of jail free card.
While many of the goals sought in a class action lawsuit filed against the PEC last year have been met, and some are still in the process of resolution, the proposed settlement bypasses the mismanagement of PEC affairs by Board Directors, Advisory Directors and upper management. In fact, it exonerates them from any wrongdoing by simply not addressing the charges against them.
In July 2007, four PEC members (ratepayers) refiled a lawsuit that had originally been filed by Lee Beck Lawrwnce. That suit was dismissed due to a technicality. PEC members John Worrall (Round Mountain), Linda G. Evans (Driftwood), Glenn Van Schellenbeck (Lago Vista) and Joseph R. Krier (who later withdrew), are the Plaintiffs in the current suit.
The suit specifically names General Manager Bennie Fuelberg, Asst. GM Will Dahmann, Bud Burnett as President of the Board, each Director and Advisory Director, and charges them “individually and in his/her capacity as” named position on the Board. Fuelberg, Dahmann, and Burnett have all “retired” or otherwise left the Board. The remaining 13 Defendants remain on the Board. (Board members Price and Adair are not running for re-election this June when their terms expire).
The suit alleges that the Defendants have breached their fiduciary duties in their operation, management and administration of the PEC. It further alleges the breach of fiduciary duties in the accounting and management, investment and disposition of the “Patronage Capital.” The suit alleges excessive compensation, possible breach of the Articles and By-laws of the PEC and possible failure to report financial information, accounting records and financial reports. (The full lawsuit is available for reading on the PEC website.)
Plaintiffs in the suit clearly state that the “classs action suit is not intended to harm the PEC or its service to its members, and neither is it aimed at the rank-and-file dedicated employees. Instead, this lawsuit seeks to place responsibility on the officers, directors and advisory directors for a variety of wrongful practices, to recover on behalf of the member/ratepayers for the damages caused by these wrongful practices, and to reform the organization so that it operates democratically, transparently and in the best interest of its members as envisioned….”
Clearly one purpose of the suit was for the Defendants to be held responsible and accountable for their alleged wrongful actions. The proposed settlement does not do this. Instead, it allows the Defendants to continue on the Board and make no personal recompense either to the co-op or for legal costs of the settlement. These are the very same people who have received millions in co-op dollars, disallowed patronage capital refunds to co-op members, had extravagant travel expenses, and possible yet–to-be-uncovered payments and perks.
There are several facts to review, not the least of which is that the Board (named Defendants) has been overseeing the litigation on behalf of the co-op. State Senator Troy Fraser, a co-op member from Marble Falls, has characterized this as “the fox guarding the hen house.”
Another very interesting fact is that the PEC’s insurance provider, AIG , is not covering the cost of the entire settlement of $4 million. Instead, they are paying $2.6 million, leaving $1.4 million to be paid by co-op members (that’s us, the ratepayers). Again, the named Defendants will pay only the same amount that all other co-op members pay – about $7.60.
Sen. Fraser has expressed concern over the settlement terms. He stated, “It is customary for an insurer to pay the entire claim, in this case it would be $4 million less the $125,000 deductible. The fact that PEC’s insurer refused to pay the $1.4 million of the claim sends a message that the insurer found sufficient wrongdoing to deny paying part of the claim.”
Sen. Fraser additionally stated, “The PEC directors were quick to agree to pay the $1.4 million with the member’s money and none of it coming out of the director’s pockets. Why should the cooperative members have to pay for any part of this settlement? Either the insurance policy should pay the entire amount, less the deductible, or the Board of Directors and former General Manager Bennie Fuelberg should personally be responsible for paying the remaining portion. The cooperative members didn’t do anything wrong, but they are the ones being penalized for a Board of Directors that is attempting to indemnify themselves for potential wrongdoing. Someone needs to convince me why this settlement isn’t a rotten deal for the cooperative members.”
Sen. Fraser has hit the nail on the head.
Another portion of the settlement agrees to hire a private consulting firm out of Chicago, Navigant Consulting, Inc., to do an independent, comprehensive review of PEC’s business, management and financial practices over the past 10 years with close attention to the activities of the past 5 years. The review will also cover corporate governance, compensation, expenses and investments.
(One of the really rotten apples in this barrel, PEC subsidiary Envision, was initially purchased in 1990 (50%), another 25% in 1995 and the final 25% in 2000 for a total of $10 million. Fuelberg was advised against this purchase, but moved ahead anyway. Both he and Burnett serve on the Board of Envision. The subsidiary has consistently lost money).
While Senator Fraser and the Senate Business and Commerce Committee agree that the State Auditor’s Office (SAO) should conduct the review, the SAO is unavailable for several months. Therefore it was agreed that Sen. Fraser would specify areas to be included and give parameters for the Navigant audit. PEC has also agreed that the SAO will review the Navigant audit report. If necessary, Senator Fraser can introduce legislation that would place PEC under the regulation of the Texas Public Utilities Commission or call for a SAO audit in a year. New General Manager Juan Garza has been given complete control of the audit and estimates the cost to be somewhere between $250,000 to $450,000, again at PEC expense. Senator Fraser has been very positive regarding Garza’s cooperation and management of the audit. Preliminary reports are expected to be available for PEC’s June annual meeting.
But the question arises: What if the audit finds further wrongdoing by the Defendants? If the current suit settlement is accepted by members, it releases the Defendants of any further legal action against them. The legal jargon in the proposed settlement says, “Plaintiffs will release all class action claims arising from or related to those alleged in the Petition….” and PEC agrees to do same. This says that the Defendants (PEC’s board members and top management) will no longer be held responsible for any wrongdoing that we now know about or learn about in the future. In other words, they get off scott free now and forever. And they can remain on the Board until they decide to retire or the member/ratepayers decide to vote them out. Some of the current board members have two years still remaining in their term.
The Plaintiffs in the lawsuit are willing to make this settlement because they feel many of the objectives and goals have been reached. They also have concerns that continuation of the suit could cost the members more if the litigation continues and the court rules against them.
The Senate hearings are not complete and there is additional legal action against the specific Defendants being considered by parties other than co-op members. Criminal charges may yet be filed pending this currently active investigation.
PEC’s ratepayers are clamoring to be heard. We ratepayers have been hoodwinked and bamboozled for decades. Now we have a chance say to PEC's management, “you've been running a lot of red lights, now it's time you get fined!”
I urge all PEC member/ratepayers to take the time to object to the proposed settlement as it is currently structured. The proposed settlement letter from the PEC instructs members what to do: If you do not agree with the proposed settlement, write a letter to the court saying so. You must identify the case: WORRALL, et al. v. Pedernales Electric Cooperative, Inc., et al: Cause No. D-1-GN-07-002234 in the 353rd Judicial District Court of Travis Co. TX.
Send your letter to: :
Amalia Rodriquez-Mendoza
Travis County District Clerk
P.O.Box 679003
Austin, TX 78767-9003
Copies must also be sent to:
William Ikard
Ikard Wynne LLP
515 Congress Ave. STE 1320
Austin, TX 78701
David C. Duggins
Clark, Thomas & Winters PC
300 West 6th St, 15th Floor
Austin. TX 78701
Stephen E. McConnico
Scott, Douglass & McConnico
600 Congress Ave. 15th Floor
Austin, TX 78701
PEC’s web site, www.pec.coop, has the full settlement posted. Good luck trying to understand all the legalese. The settlement and objection letter received by members state the important highlights, but there is no real insight into how or why this settlement was reached. This proposed settlement has several bumps and corners that will be covered in a forthcoming column.
Linda Kaye Rogers grew up on a small family farm in the Rio Grande Valley. She received her BA and Masters of Science in Social Work from UT Arlington. She has taught smoking cessation, communication skills, stress management and parenting in hospitals, corporations, community groups and churches. Linda Kaye moved to Wimberley in 2000 where she built a straw-bale cottage and immediately established a rainwater collection system as her water supply. That same year she began volunteering at the Katherine Anne Porter School and has worked in various capacities at the school. She is an avid organic gardener, animal lover, conservationist, and environmentalist. In 2005 she spearheaded efforts to defeat a road bond that would have benefited a developer and cost Woodcreek North residents a dramatic and 20-year tax increase. Linda Kaye is a member of PEC4u, the group of PEC members who initiated the investigation of PEC Board governance and practice.
Opinion
By Linda Kaye Rogers
The power of apathy is amazing.
For years the board of directors of the PEC, under the iron hand rule of General Manager Bennie Fuelberg, had their way with customers by voting themselves excessive remunerations and perks, traveling in high class and ignoring the principles of co-op management and existence. These and other excesses have been exposed for all the world to see during the proceedings of a class action lawsuit filed last year against the PEC.
I've often wondered how the PEC board and top management was able to get away with fleecing its customer/owners for so long.
My theory is that the co-op's member/owners (that's us, the customers) were just tickled pink that when we flipped on the switch...the lights came on. Maybe we all simply placed our trust naively in a Board of Directors that had such impressive resumes. Many of us never questioned the old proxy voting system which gave the Board the right to nominate and vote for themselves, and where only one choice – the same old names – appeared year after year.
Members were all sent ballots each year to vote on a carefully selected group of board candidates and we were enticed to return our proxy ballots with the chance of winning a big prize. If we attended the annual meeting in Johnson City, we had even more chances of winning prizes. Whoopee! All through this time, PEC received terrific PR in the Texas CO-OP Magazine and all across the Hill Country. Who wouldn't be proud to be part of the largest and most prosperous co-op in the country? Surely, we imagined, the leadership at the PEC was doing everything right.
There's no denying that the PEC provides superior power service and customer service. And our electric rates have historically been below the national averages. Former General Manager Fuelberg was certainly no dummy. He knew the business and how to get things done. He knew how to work with (some say manipulate) a lot of people, including members of the Board of Directors. Intimidation seems to have worked pretty good, too. A number of employees, past and present, who shall remain anonymous, have related stories about retaliation in response to complaints or questions.
Of course, money does talk. Who of all those carefully screened and selected board members would really complain about sitting on a board where all the business was decided before they arrived for the meeting? They sat in a beautifully appointed board room in posh chairs, rubber stamped the agenda, then went home with big fat "pay" checks in their pockets.
Fuelberg may not have been present at all the board meetings. But information is emerging that he orchestrated just about every move and decision. Current temporary presiding board president, E.B. Price, has admitted so. Price told this writer at PEC's March 17 board meeting that they (he and other board members) were "surprised" to learn of all the embarrassing managerial shenanigans being reported over the past year. He repeated this at the March 27 Senate hearing in Austin.
These are PEC's leaders, members of the PEC Board of Directors, who supposedly are on top of every major financial and management decision. Apparently they have been rubber stamping decisions without insight, foresight OR hindsight! I wonder, have they ever cared at all about the members (that's us, remember, the one's who pay the bills)?
In 2006 a group of members finally had enough and joined together to form PEC4u. A new collective light was switched on in this gathering of activists/thinkers/questioners. They had some particular areas of concern, not the least of which was the financial management of the co-op and lack of transparency of the Board's actions. PEC4u has turned on a light in the dark basement of PEC 's management. Effective challenges were launched questioning PEC's governance, board compensation, the election process, as well as the co-op's interaction with members.
The group has also voiced concerns about lagging progress in the areas of power conservation and renewable energy. This new light has helped to expose a massive scandal right here in our beautiful Hill Country backyard. You can bet on it that there are more dark rooms that need illuminating.
For more enlightening information, check out the PEC4u website at: pec4u.org I'm happy to report that PEC’s own website has become somewhat more open and informative, at pec.coop.
Native Texan Linda Kaye Rogers grew up on a small family farm in the Rio Grande Valley. She received her BA and Masters of Science in Social Work from UT Arlington. She has taught smoking cessation, communication skills, stress management and parenting in hospitals, corporations, community groups and churches. Linda Kaye moved to Wimberley in 2000 where she built a straw-bale cottage and immediately established a rainwater collection system as her water supply. That same year she began volunteering at the Katherine Anne Porter School and has worked in various capacities at the school. She is an avid organic gardener, animal lover, conservationist, and environmentalist. In 2005 she spearheaded efforts to defeat a road bond that would have benefited a developer and cost Woodcreek North residents a dramatic and 20-year tax increase. Linda Kaye is a member of PEC4u, the group of PEC members who initiated the investigation of PEC Board governance and practice.
OPINION
By Charles O'Dell, Phd
Anyone who believes the days of smoked filled back rooms where elected officials collaborate with special interests to make deals and make plans to destroy their opposition are over is in for a rude awakening, and its time to start paying attention.
District Judge Robert T. Pfeuffer turned long established jurisprudence on its head last Wednesday, March 26, 2008, when he delivered a five sentence written ruling in favor of Nick Ramus, who has been previously convicted as a public nuisance, in his civil suit against Hays County.
Following is Judge Pfeuffer’s ruling in its entirety:
“Gentlemen:
In connection with the various matters under advisement in the above styled cause, please be advised that Intervenor’s Objections to Plaintiffs’ Evidence is overruled.
Plaintiff’s Motion for Partial Summary Judgment is granted.
Defendant Hays County’s Motion for Partial Summary Judgment is denied; and,
Intervenor’s Motion for Partial Summary Judgment is denied.
Mr. Newsom is requested to prepare and circulate amongst counsel, a Proposed Order reflecting the Court’s ruling.”
That’s it.
Judge Pfeiffer’s ruling stopping a county government from exercising its statutory authority to enforce health and safety laws flies in the face of all previous case law. Previous court decisions have all found that no county could be stopped from exercising that statutory authority. Left unchallenged, the ruling would cripple the rule of law in Hays County, consolidate special interest control and reward a failed county Environmental Health Department for not following health and safety laws.
An objection to the false evidence presented by the plaintiff in his sworn Affidavit and by his attorney, Skip Newsom, was also overruled by Judge Pfeiffer. Most of what Ramus swears to be true and correct is undocumented and was shown to be false. Such claims of having a $100,000 septic system at his San Marcos property with two 8,000 gallon holding tanks and over 6,000 feet of drain pipe, and a $1,000,000 property were shown to be false.
The Judge gave no rationale or reasoning for his confounding ruling.
None of this could have happened without what appears to be an orchestrated effort by Pct. 2 Commissioner Jeff Barton, Pct. 3 Commissioner Will Conley and a cadre of good old boys using Ramus in a high stakes effort to reestablish a Hays County shadow government of special interests.
Ramus filed suit against Hays County after commissioners court on April 17, 2007 revoked his commercial on-site septic permit that facts on the ground show was in all likelihood issued either in error or illegally by the Hays County Environmental Health Department.
Barton and Conley both supported the Ramus suit and expected it to end in a settlement that would have embarrassed newly elected County Judge Liz Sumter and Pct. 4 Commissioner Karen Ford. Barton means to show who controls commissioners court in Hays County and has already begun a raid on the public treasury with his citizen-proof $19.5 million limited tax bond after voters defeated his $172 million road bond last year. Barton will sponsor a much larger road bond in the upcoming November election.
When it became clear that a court hearing would occur, Ramus’ attorney stalled for time while the Bartons’ newspaper, The Hays Free Press, and other associated on-line entities attempted to frame poor Mr. Ramus as a victim.
To improve Ramus’ public image, someone (some believe it was Conley) convinced the Hays County Republican Party to sponsor Ramus as its candidate for Pct. 1 Commissioner. Judge Pfeuffer’s ruling for Ramus may help to polish his new public image, but it doesn’t change the hard facts.
Now Barton and Conley need Pct.1 Commissioner Debbie Ingalsbe’s vote to keep the county from appealing the Pfeuffer ruling. Otherwise, all their back room efforts will be dashed in appellate court. Ingalsbe initially voted to revoke the Ramus permit.
If the Pfeuffer ruling isn’t appealed, Barton will open the floodgates on his special interest transportation and development projects at great cost to taxpayers. More importantly, Hays County will be back in the hands of those who pick and choose which laws to enforce and who to enforce them against. They are the good old boys.
Barton and Conley were elected to serve the public interest but have abused their positions of authority and have used our public resources to gain the political control they need to serve their special interest supporters. Ingalsbe is in a position to hand that to them.
“The will of the people is the only legitimate foundation of any government, and to protect its free expression should be our first object.” -- Thomas Jefferson
You know what to do.
County Judge Liz Sumter
(512) 393-2205
lizsumter@co.hays.tx.us
Pct. 1 Commissioner Debbie Ingalsbe
(512) 393-2243
debbiei@co.hays.tx.us
Pct. 2 Commissioner Jeff Barton
(512) 262-2091
jeff.barton@co.hays.tx.us
Pct. 3 Commissioner Will Conley
(512) 847-3159
will.conley@co.hays.tx.us
Pct. 4 Commissioner Karen Ford
(512) 858-7268
karen.ford@co.hays.tx.us
As co-founder of Hays Community Action Network (HaysCAN) in 2003, O’Dell strives to carry out the mission of ensuring open, accessible and accountable government. He is a long time and close observer of the workings of the Hays County Commissioners Court. He earned a degree in Agricultural Education and a Masters in Ag Economics at Texas Tech, and, later, a Ph.D. at The University of Maryland while employed as a Research Economist with the U.S. Department of Agriculture (USDA) in Washington, D.C. Texas born and raised on a family farm, O’Dell is a Hays County Master Naturalist and a board member of the Ethical Society of Austin.
We are concerned for the future of our beautiful Wimberley Valley.
A slick developer is in town and has bought 675 acres out of the old True Ranch just west of Wimberley on RR 2325. He and his wife are proposing to develop the property into urban density, one-acre lots which, when built out, will total 430-plus homes. He has dammed several creeks to create private lakes as amenities to his proposed development, has cleared wide swaths of native vegetation for dirt roads, and is already asking people to option lots before Hays County has even begun a preliminary plat review. His sales manager on site has told visitors that the developer is seeking to expand his property by an additional 500 acres, which could add another 350 homes.
The developer has powerful friends in the Texas Legislature (Senator Jeff Wentworth and Representative Patrick Rose) who very quietly sponsored legislation to create a Municipal Utility District (True Ranch MUD #1) that covers 465 acres of the property. The District is empowered to levy property taxes, to build roads and other public infrastructure, set water rates and issue debt to build water lines, and condemn land through eminent domain powers. All these powers were given to the District by the passage of Senate Bill 3 – Article X in the 2007 Legislative Session. This process could have been done through a petition to the Hays County Commissioners Court, but going to the Commissioners Court would have exposed the process to public scrutiny, and, undoubtedly, to some serious questions that have yet to be asked.
The big question for this proposed urban style development is a reliable source of water for domestic use and for fire protection. The developer says he has three water supply options for the proposed 430 homes. These are: 1) Wimberley Water Supply Corporation (well water); 2) Aqua Texas (well water); and 3) Importing water by pipeline from the Canyon Lake area. For the short term the developer has told visitors that he can drill a commercial well on the property to serve the first phase of 72 lots.
Water supply experts in Hays County have said that demand now being placed on the southern portion of the Trinity Aquifer by commercial wells and the approximately 2,500 existing residential wells exceeds its reliable capacity under drought conditions. All the options above, except the pipeline from Canyon Lake, would dramatically increase demand on the Trinity Aquifer and put existing water supply for homes in Wimberley, Woodcreek, Woodcreek North, and outlying areas in jeopardy. The plan by the developer to consider groundwater to supply the proposed homes is, in our opinion, irresponsible.
Current Hays County Subdivision regulations do not require the developer to demonstrate that he has a reliable source of water for domestic use and fire protection until the final plat stage – very late in the game. Because of the limitation of the Trinity Aquifer to supply adequate groundwater for this huge development, we recommend that concerned property owners in Southern Hays County contact their elected officials and ask them to stop this development before it dries up local residential and commercial wells and makes Jacob’s Well, Blue Hole, and Cypress Creek go dry.
These developers need to be told by this community that we will not tolerate an urban style development of one-acre lots that will not only jeopardize our water supply, but will overload our schools, and will limit rainfall recharge into the aquifer thus impacting the springs which feed the area creeks and the Blanco River. Cielo Ranch on Purgatory Road was developed by the same people at a density of 8 acres to 21 acres per lot. We believe that the True Ranch project would be acceptable with a minimum lot size of 10 acres and with deed restrictions that the homes must be built with rainwater collection systems for their domestic water supply.
Please help stop a small city from being built just west of Wimberley. Thank you.
Jim, a civil engineer, and his wife Jean live off RR 2325, nearby the proposed subdivision.
It seems the lawsuit settlement is going to remain foremost in the minds of PEC members for a while longer. There are currently two prevailing sets of thinking about the lawsuit and the proposed settlement. One is “that's life, let’s get on with the business,” coming mostly from the defendants in the suit. The second is the feeling that the guys who caused the problems may get off scot-free.
