DSWSC attorney Phil Haag went out into the hallway in an effort to untangle the mess, and for about ten minutes the audience sat in awkward silence as Harris fumbled with papers on the table in front of him
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By Charles O'Dell
There were fireworks at a packed Dripping Springs Water Supply Corp. (DSWSC) board meeting this past Monday night as members pushed to oust two controversial directors.
When board president Steve Harris called for public comment, attorney Lynn Sherman immediately stood and announced that he represented about 135 DSWSC members and on their behalf was filing charges against Harris and fellow board member Larry Brewer.
and board president Harris
As Sherman sat down, board member Jim Walden began reading his motion that referenced the member charges just filed with the Secretary/Treasurer and calling for a special membership meeting for the purpose of removing Harris and Brewer.
Harris calls in deputy to squelch board member
Harris said that Walden was out of order but Walden continued reading his motion. “That’s twice,” said Harris, and when Director Walden continued with his motion Harris asked a Hays County Deputy Sheriff to “remove Mr. Walden.” Walden got up and left the meeting followed by the deputy as a member in the audience stood and questioned why Walden wasn’t allowed to make his motion.
Board member Brewer didn’t take the charges or Walden’s motion well. Brewer gathered his papers together, got up and said, “If this is what you want, it’s fine with me because you know what, you need a quorum. I’m excusing myself.” As he left the meeting, Brewer exclaimed that he hoped the dissident members had a good lawyer because, “I’ve got big bucks.”
DSWSC attorney Phil Haag went out into the hallway in an effort to untangle the mess, and for about ten minutes the audience sat in awkward silence as Harris fumbled with papers on the table in front of him.
When Walden returned and public comment resumed, a former corporate attorney for DSWSC continued with bad news for Harris. Attorney Joe Pool spoke about his research turning up three IRS liens against Harris, and along with his own civil suit against Harris said that, “I don’t want Harris representing me in any capacity, but especially having to do with budgets or discretionary spending.” The attorney called for Harris to resign.
After closing public comment, Harris pressed on with the meeting agenda.
In the first item of business, a motion to approve minutes of the previous three board meetings failed by a vote of two yeas and two abstentions. A quorum of three is required to conduct business and a majority vote of three was required to approve motions. Attorney Haag is paid $200 per hour to edit the minutes of each board meeting.
After establishing a date for the next board meeting (January, 2011), Harris moved on to the next agenda item. Walden called attention to agenda item 5b (other related business) that Harris had skipped. Walden then made his motion again under that item and called for a special membership meeting on December 27, 2010, for the purpose of removing Harris and Brewer. Harris asked attorney Haag if the motion could be considered under that agenda item and Haag said Walden’s motion needed to be taken up at the next regular board meeting or at a called special board meeting.
Motion to approve payment of unspecified legal services fails
GM Doug Cones
There was still more tension to come. During the Treasurer’s financial report, general manager Doug Cones presented an invoice from attorney Haag’s law firm (McGinnis, Lochridge & Kilgore) in the amount of just over $15,000, asking for board approval because portions of the invoice did not specify the basis for legal services billed. Haag explained that some of the legal costs were associated with the recent investigation conducted regarding the employee harassment complaint filed against Harris in 2009.
Harris’ motion to approve the legal services invoice failed by a vote of two yeas and two abstentions.
In his report on legal matters, Haag noted that he would review the member petition calling for removal of Harris and Brewer and would recommend, “a course of action to the board.” A course of action is clearly spelled out in the Corporation by-laws.
Later in the meeting, two board members severely criticized a Performance Review Plan for the General Manager that Haag prepared and was offering for board approval. Directors Garnett and Walden grilled Haag about the plan and made clear they didn’t see anything necessary, relevant or worthwhile with the Haag Plan. Walden expressed concern that Haag’s plan was just an employee harassment complaint against Harris being “buried,” and at great expense to the Corporation members.
Harris made a motion to table the item but it failed for lack of a second. Then the general manager, Doug Cones, said that he could live with Haag’s Performance Plan because it described what he had been doing for the past twenty four years, and, “if it would help stop the nonsense” he would be OK with the Plan. Cones already operates under a management contract negotiated by Harris. Wolf moved to approve and the motion passed 3 - 0.
Conflicts over audit and a conflict of interest
Harris continued to demonstrate a lack of understanding about the role of a capital budget, and despite repeated assurances from the auditor that the financial audit showed a “clean” and healthy financial condition of the corporation, Harris did not want to approve the audit report.
While the board was considering Code of Conduct for employees and board of directors, Walden made a final attempt to implement the conflict of interest provision contained in the by-laws when he made a motion to include in the code of conduct for board of directors prohibiting a board member voting on a motion pertaining to removal when that board member was the subject of charges seeking his/her removal.
The motion failed when Harris joined Wolf in voting nay, creating a 2 – 2 tie. Attorney Sherman leaned over and suggested to Haag that he check with the DSWSC’s Error and Omissions policy about Harris voting on his own removal as being a conflict of interest.
DSWSC members have filed charges against Harris and Brewer as called for in their by-laws, and are seeking to have both of them removed from the board if they do not resign.
The next step is for the board to convene a special membership meeting at least twenty days following the charges being filed with the Secretary/Treasurer, when the Vice President, Travis Garnett, will preside according to the by-laws, since charges have been filed against the President.
Then the matter will be up to the membership to decide because only the DSWSC members have the power to remove those who they have elected.
Harris did not respond to a request for an interview.