Woodcreek Receives $100,000 LCRA Grant For Jacob's Well Preservation

From a June 26 City of Woodcreek Press Release:

The Mayor of the City of Woodcreek, Gloria Whitehead, announced today that the Lower Colorado River Authority (LCRA) has awarded the city a $100,000 Partnership in Parks Grant (PIP) for the Jacob's Well Natural Area. The LCRA PIP grant program funds improvements and development of park and preserve land in the LCRA service area. Jacob's Well is an artesian spring thought to be the longest underwater cave in Texas and discharges spring flow to form the Cypress Creek just north of the City of Woodcreek and upstream from Wimberley.

"We would like to thank the LCRA for this generous grant which will enhance our community by developing a trail system for the Jacob’s Well Natural Area," said Mayor Whitehead. "We look forward to starting the first phase of trail access for this historic landmark spring."

The Jacob's Well Natural Area was purchased in 2006 by the Wimberley Valley Watershed Association, a local non-profit land trust whose mission is to protect the water quality and quantity of the region. "The WVWA is excited about the opportunity to partner with the City of Woodcreek and LCRA to preserve this vital water resource for the Texas Hill Country and the State of Texas. Jacob's Well is truly a unique natural wonder and these funds will help us create safe access for all visitors to the preserve," said Patrick Cox, President of WVWA.

If you would like to visit Jacob’s Well Natural Area, the public is invited to a benefit for the Wimberley Valley Watershed Association this Saturday June 28, 2 p.m. to 6 p.m. The WVWA is celebrating the LCRA grant and the recent Hays County Commissioners’ commitment of park bond funds to Jacob's Well Natural Area. The event is by donation and will benefit the WVWA environmental education and water quality monitoring programs.

Tours of the preserve will be led by the Hays County Master Naturalists to identify native flora and fauna. Tours will be given every hour beginning at 2:30 p.m. Local leaders will speak including Mayor Gloria Whitehead, County Judge Elizabeth Sumter and Andrew Sansom, Director of the Rivers System Institute. Entertainment will begin at 4 p.m., with live music from piano virtuoso Dylan Meek. Beverages and light hors d'oeuvres will be served. Join the fun this Saturday at Jacob’s Well. Bring your swim suit and dive in to celebrate the cool spring waters of this unique treasure of the Texas Hill Country.

PEC Not Following Spirit of 'One Member, One Vote' Rule

By Linda Kaye Rogers

It seems our wonderful electric co-op, PEC, just can’t quite go along with the standards of practice of all other electric co-ops. Nope, we have to continue on the fringe and over the edge in our approaches to governance and co-op behavior.

So what is it now? Multiple meter memberships.

The IRS code for tax exemption status for 501c(12) calls for democratic control and defines that control as “one member: one vote." In the decision of Puget Sound vs Plywood, it was stated that there must be democratic control. The concept was that weight and votes not be tied to patronage capital or equity. What was not clearly stated was that one membership is ONE body/entity. So, how does PEC handle this? PEC charges a membership fee for every meter and then every “membership” gets a vote. (How they separate that from patronage capital and equity is another question). So PEC seems to be within the law, but certainly outside the intent or the spirit of the law. And they may be riding a very fine line on the legality of it.

Contact with the National Rural Electric Cooperative of America (NRECA) confirms that PEC is the ONLY cooperative who has this practice. In fact, some cooperatives are very explicit in their definition of one member: one vote, stating no single member may have more than one membership or one vote, regardless of number of meters.

So why is this important? Because MEMBERS own the coop – equally. But if some members have more than one vote, they have more control. And there are some members who have a LOT of control, which means we are outside the parameters of “democratic control."

In late May it came to light that while PEC has 222,524 “member(ships)” it has only 203,592 “customer/owners.” It has 18,932 commercial meters with 47 single member/entities having 99 or more meters/votes. These “members” are primarily developers, governments, utilities, schools, and multi-family housing. It has been speculated that Time Warner Cable is the largest entity with about 1,700 meters/votes. While there are hundreds of members who have small businesses, ranches with separate meters for wells and barns, etc., the “47” are clearly large businesses. Decisions made for business may not hold the best interests of individual members, and vice-versa. But, single-meter members are the meat and potatoes of the co-op!

So let’s look at how this plays out in a voting situation. PEC will conclude its first ever “democratic” election of board directors on Saturday, June 21. As of June 18, there were 22,247 BALLOTS returned, but there were 30,284 VOTES cast. That would be 8,037 votes that have come from multi-meter memberships – roughly 30 percent of the votes. Right now we have no way of knowing if MANY of the smaller meter holders returned ballots, or if just a handful of the BIG meter holders are controlling the vote. Either way, to my thinking, we have a problem.

This is not Democracy in action. Clearly, there is still much clean-up to be done in the house of PEC.

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.

Dripping Springs, Dense Development and Unintended Consequences

Opinion

By Charles O'Dell, Phd

An ill advised power grab attempt twenty five years ago by City of Austin officials created unintended consequences that are menacing our communities today. This is a story of what might have been.

Twenty five years ago Dripping Springs didn’t have a subdivision ordinance to regulate development within its city limits and in its small extraterritorial jurisdiction (ETJ). Rural Hays County was subject to weak state regulations, so Austin officials strip-annexed along several county roads leading to Dripping Springs and claimed five miles either side of those annexed strips. Austin officials saw the future of development in Northern Hays County and wanted to control that development. Land owners had other ideas and petitioned to be in the Dripping Springs ETJ. A Hays County court approved the new alignment.

Dripping Springs, with a population of only 1,600, now controls an extraordinarily large ETJ that stretches nearly to Buda with an estimated population of 25,000, and has acquired unique annexing authority that even the City of Austin doesn’t possess, island annexation.

It can be reasonably argued that without the extra large area of jurisdiction precipitated by the action of those long forgotten Austin officials, and subsequent special annexation authority gained by this small general law municipality through its political connections, there would be no high density Belterra or the other high density subdivisions Dripping Springs approved.

These subdivisions would have followed existing county regulations, producing low density Sunset Canyon like development, and making an LCRA water line to Dripping Springs economically infeasible. Without the massive ETJ to sell off, city insiders would not have had opportunities to engage in flipping large tracts of land and entering into illegal development agreements like Belterra with over a hundred variances

Because there would be no California developer high density Belterra, our communities would not be fighting the first permit for direct discharge of effluent into Bear Creek.

The unusually large ETJ provides Dripping Springs officials opportunity to obtain substantial development fees, and incentive to approve high density development agreements with variances. ETJ residents have no representative voice in these development decisions that benefit only the City at the expense of ETJ residents.

If Dripping Springs only had its normal ETJ (extending 1/2 mile from its city limit) the Mayor would not have borrowed $9.5 million for a central sewer system that will serve only a portion of its 1,600 city residents, and virtually no resident living in the ETJ. Without expanded ETJ development fees the city of 1,600 does not have the tax revenue base to support its high operating budget.

City officials argue that development in the ETJ, especially along the Hwy 290 corridor, would be worse without the City’s authority. When I recently asked Mayor Purcell what the City's strategy was for annexing along Hwy 290 and what do he hoped to achieve, he responded:

“When considering whether to annex property (abutting 290 and elsewhere), I consider foremost what the advantages are to the City (the community, its voters, taxpayers, businesses and property owners). If I can identify an opportunity to expand application of our rules, improve traffic safety, increase tax revenues, and/or mitigate property disputes, I am generally supportive of annexation.”

By expanding application of City rules the Mayor means increasing density beyond what is allowed in the ETJ. Increasing tax revenues is quite clear and an expanded tax base, especially business sales tax, is a necessary strategy for the City to support its high operating budget. One time development fees from the ETJ are just too unpredictable.

The City’s spending problem is addressed by annexing businesses along Hwy 290. The property owner is allowed greater density and the City increases its sales tax (and ad valorem tax) revenues…without any cost to the City. However, greater density along Hwy 290 doesn’t satisfy one of the Mayor’s considerations, improving "traffic safety.”

Dripping Springs has no utility to offer these “island” Dripping Springs. The Mayor has long expressed a desire to increase the City’s population to 5,000 so they can vote to become a home rule municipality. I don’t believe that. Dripping Springs now is able to negotiate (with leverage) annexation agreements with businesses along Hwy 290, expand City tax revenues and do so without any cost to the City or lip from new voters. What a deal.

The Mayor leveraged HEB and Home Depot into the city limits by manipulating the City’s subdivision ordinances. After extensive public hearings and citizen input the City’s new subdivision ordinances were dutifully passed by the city council. The maximum size commercial building allowed was 125,000 square feet. When Mayor Purcell learned HEB and Home Depot were looking at sites along Hwy 290 in the ETJ, he had his city council dutifully amend the ordinances to allow a maximum size of only 65,000 square feet. This is not an economical size for either of these big box stores and the city council agreed to a size variance, but only if they located inside the City.

We have come full circle on the ill advised power grab by the City of Austin twenty five years ago. Its fateful action created a Frankenstein that has a life of its own now and gave us Belterra. Now Belterra is seeking the Hill Country’s first permit to discharge treated wastewater directly into Bear Creek. Six governmental agencies, including the City of Austin, have opposed the permit. Ironically, the same folks who laid the groundwork for Belterra twenty five years ago voted Wednesday to approve a settlement agreement allowing direct discharge for Belterra. Mayor Purcell has made it clear that ETJ residents are on their own.

Perhaps our elected county officials will do better by us.

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.

Silver Lining In High Gas Prices? Think More Local Shopping

By Rocky Boschert

It seems there is a silver lining in everything. In fact, there is a silver lining in the economic pain that high gasoline prices are causing with low and middle income consumers. What can be the silver lining in that, you ask? The answer is simple: It makes some of us think more responsibly about our consumption habits – both how we consume and where we consume.

Living in Wimberley, most of us “penny-wise, pound foolish” shoppers are used to going to Wal-Mart, Lowe’s, and Office Depot in San Marcos to save a few bucks. Except now we are confronted with the specter of paying a minimum $10.00 for gasoline to do the shopping round trip. Also, we are now confronted with the type of automobile we drive. So unless you are in a business that necessitates owning one of the gas guzzlers, you don’t look too smart right now if you own a Ford Expedition or a Hummer (the new name for those vehicles is the Ford “Valdez” and the “Huffer”).

As a result, what I think is most good about high gasoline prices is that local proprietors may now get some of the business income we normally would have given to another town or state. All of a sudden the third-world, manufacturing outsourcing enabled low prices offered by Wal-Mart and the other big box retailers don’t look so good when you have to pay $10.00 or more just to get there and back. This is a good thing, although it would have been nice if smart consumer thinking was just an integral sound American economic value rather than something created by the pain of $4.00 gasoline.

My wife and I have always tried to shop locally as much as possible. Where we falter is in large purchases for our school or my business, where either the products are not available in Wimberley or the economy of scale is simply too big to ignore. We have tried to instill the “buy local” value in our 17-year-old son, who now takes it to a more responsible level by refusing to buy any clothing made in emerging economy sweatshops. In my opinion, he is a truer American Patriot that most of us because he makes his economic and consumer decisions based on what is good for our country as a whole, not just his pocketbook (or his parent’s pocketbook, in fact).

Ironically, and sadly, we have been down this energy crisis road before (back in the 1970’s). And what did we do about it? We made a token attempt to develop alternative energy but then pulled the plug on that effort when we got friendly again with Middle East dictators and supported corrupt banana republics in South America. Other than the Bush family-Saudi Arabia connection and Egypt, we don’t have that anymore. Instead, we are saddled with the painful and costly oil grab known as the Iraq invasion and occupation. Now, 4,200 American lives later and countless dead Iraqis, we still have $4.00 a gallon gasoline. Europe pays $8.00 for their equivalent of a gallon of gasoline. I wonder how much higher their petrol costs would be if they controlled the Iraqi oil fields? Yes, the surge must be working, as John McCain says.

Bringing it back home, you can conserve gasoline by getting the best lunch deal right here in Wimberley: The under $6.00 “organic” chicken salad sandwich with green salad at the new “Fresh”, across from Maui Wowi. Or you can shop at Ace Hardware or King Feed instead of Lowe’s. Or you can get your printing done at Cecil’s instead of Kinko’s. Or you can do your grocery shopping at Brookshire Brothers instead of HEB. Well, maybe we shouldn’t get carried away.

Ultimately, if the hallmark of American capitalism is the small businessperson, then $4.00 a gallon gasoline is a good reason to get back to the original reason American capitalism was so successful. No sweatshop outsourcing, no corporate lobbyists buying politicians, no crony government bailouts, no credit card company harassment, no Pentagon propaganda, no insensitive HMOs, hospitals and medical providers, and no war profiteering. We can use the pain of high gasoline prices as a good time to get back to good old local American currency bartering for goods and services that directly supports the communities in which we live.

Rocky Boschert has resided in Wimberley since 1993. He currently serves as board president of the Katherine Anne Porter School (KAPS) in Wimberley. Mr. Boschert owns and manages Arrowhead Asset Management.

Transformed From Village Idiots to City Elders

The comment below was posted Tuesday, June 10, in the Wimberley View Online Edition in response to the day's top story: "Village of Wmberley becomes a city."

I second the commenter's analysis. The council's (slim majority) reasoning for the name change, as reported in the story, was superficial at best, and against the grain of everything the Wimberley community represents. The three council members who voted for the change (Roccaforte, Larson and Xiques) displayed considerable chutzpah in rushing this important question to a conclusion, without optimum input from the citizenry.

Mark Twain might have remarked that perhaps the thinking was to grant council members immunity from ever being referred to as "village idiots." (Present company excluded, of course).

-- Bob Ochoa, Online Editor

_________________

According to Mr. Roccaforte, Wimberley is a Type A municipality. The Texas Local Government Code provides:

"§6.002. INCORPORATION PROCEDURE. The procedure for incorporating as a Type A general-law municipality is the same as that prescribed for incorporating as a Type B general-law municipality."

Therefore, as noted in my prior post, a Type A municipality can be a "village or town." I read Mr. Roccaforte's rationale and did not find any convincing substance to it. His rationale appears to be that (1) he does not like marketing gimicks, (2) that the incorporation ballot was unclear, giving the Village/City Council the discretion to switch the name back and forth as the Council changes, (3) that the family of Pleasant Wimberley chose the word "TOWN" rather than "Village" on a grave marker, and (4) he does want to divide Wimberley but unite it. (Hmm, where did I hear the before and how well did that work?)

With all due respect to Mr. Roccaforte, I agree with Mr. Bob Emerson. This community is a village not a city. Recognizing the community for its true character is not a marketing gimick. It is reality; the truth. If Mr. Roccaforte believes that the voters were not clear in the incorporation election, then let the citizens vote on the name, or at least do a serious poll, rather than switching the name back and forth on some whim.

The decision of the Wimberley family to use the word "TOWN" rather than "VILLAGE" on a grave stone may have been to save the cost of three more letters or space limitations, which should not be now reason to change the name of a municipality many, many years later. Or, more importantly, even if the folks back then were not in the practice of calling communities "villages," it is the decision of the inhabitants who were living when the community incorporated, not of some unrelated decision those many years ago.

History is great to recognize and learn and appreciate. But, simply turning our decision over to the acts of people in the past who did not have intention to control the acts of people in the future, much less any awareness of the future consequences of their actions, is very shortsighted.

Last, if you did not mean to divide the community, Mr. Roccaforte, you would have done a better job on discerning on the sentiments of the community and insisted that your motion fail unless it passed unanimously. It could be that your intention will not be successful. What do you think? What is that road to you know where paved with?

Repeating "Property Tax Relief" Doesn't Make It So

By Linda Morgan

You can click here to hear audio from State Rep. Patrick Rose as he speaks to Andrea Lorenz of the Austin Statesman on June 5, 2008.
http://www.statesman.com/blogs/content/shared-gen/blogs/austin/hillcountry/index.html
(Then, click on ‘Listen to our conversation here’)

Ever since the 2006 Special Session, our Governor and Legislature have been patting themselves on the back for the “so-called” one-third reduction in property tax they delivered to the Texas taxpayer. In his interview with Andrea Lorenz, you will hear Rose still bragging on that accomplishment TODAY! Yes, still touting their property tax reform, today.

First of all, I would like to put a challenge out there for anyone to bring forth their 2006 Property Tax Bill and the 2008 PropertyTax Bill and show me a 33% reduction. If there is anyone out there – please, please come forward.

They have given with one hand and taken more with the other – and then have the gall to tell us what better shape we are in.

Unbelievable.

When Texans have the right to initiative and referendum, WE can then show our Legislature what a 33% cut in property taxes really looks like. And, by gosh, that will actually mean 33% off the bottom line from our 2006 Property Tax (exactly as they promised) AND we will cap appraisal limits at 2.5% per year. And, we’ll take that retroactively – thank you very much!

It is high time for the Texas Legislature to get their foot off the property owner’s neck.

If you have not already done so, please check out www.initiativefortexas.org . We must have Initiative and Referendum rights finally given to the Texas voters. This, my friends, must come first. Only then will real property tax reform follow.

Linda Morgan retired from high-tech in Houston in 2002 and headed for the hills. She is a member of the Hays County Texas Master Naturalists Chapter through which she has learned a great deal about the conservation of our natural resources and the ever-increasing growth/development issues. Ms. Morgan is a big proponent of school finance reform and real property tax relief for Texans. She is a real estate agent and remains active in the real estate market.

Once Derided PEC Subsidiary Envision Moving To Texas

By Linda Kaye Rogers

Much has been said about the money loosing subsidiary ENVISION. Now it appears that the perceptions and past reports may be inaccurate, or at least only partially disclosed.

Envision Utility Software Corporation was founded by Cooperative Services, Inc of New Mexico. PEC became its first customer in 1986. In 1990 PEC purchased 50% ownership. In 1995 another 25% was acquired and in 2002, PEC purchased the remaining 25% , making it a totally owned subsidiary of PEC at a cost of $1,016,364 plus $53,336 of the seller’s liabilities assumed. Total price tag: $1,069,700. Austin Energy has just purchased a new software program for $30,000,000. Things look better already.

PEC is Envision’s largest customer with only 1.2% of revenues generated by other customers. Envision provides all the software for operations of PEC, including the computerized billing, outage tracking, and such tasks as figuring members’ capital credits.

Envision is still located in New Mexico and three of the PEC Board members sit on its Board (at no compensation). The two additional Board Directors receive $750 per meeting and no Director receives any benefits from Envision.

So why is Envision costing us so much money? It really isn’t. The problem lies in the Generally Accepted Accounting Practice (GAAP) that requires the financial report of a wholly owned subsidiary to be shown on the parent report. The operational costs and the annual expenses of Envision are about $6,160,000. Outside revenues are about $106,500.

Up front this looks like a $6 million loss per year, but here’s the catch: PEC pays nothing for the services rendered by Envision. These services are necessary and the charges range anywhere from $1.04 to $1.75 per transaction. The service cost from Envision is about $1.40 per transaction. Envision shows a cost of services to PEC, but PEC doesn’t pay, so a loss is reflected. While Envision certainly is not making money by providing services and charging other companies, and there may even be a loss, it is not actually losing $6 million a year.

In order to rectify the false perception of a huge annual loss, and the additional costs of having Envision in New Mexico, GM Juan Garza plans to move the operations to Texas and fold the whole operation into PEC. It would then be a department like any other in PEC that is part of the operations of the co-op.
The full capabilities of Envision are yet to be maximized, making it a viable system for some time into the future.

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.

Hays Taxpayers Fuming Over Steep Rise In Appraisals

By Linda Morgan

I attended a meeting at St. Mary’s Church on Tuesday night, June 3. About 100 put-out citizens gathered to “vent” about their recent appraisals from Hays County. Some folks were complaining of 50%, 60%, even 200% increases in appraised values.

David Junkin (local attorney) gave advice on how best to go about filing a protest with the Appraisal District. Then Michael Hicks (whom I had not met before) talked about the bigger issue of getting something done by the State Legislature. Michael said he had "the ear" of Senator Wentworth and went on to say that Wentworth is willing to craft some sort of bill and work this issue in the 2009 session. I said blah-blah blah-blah blah-blah.

We have heard this for years (and YEARS) and what was delivered to us by the Legislature is/was a BIG joke. And, here we all sit just two short years later (after our so-called school property tax break) paying even more in property taxes. At one point in the meeting, I pointed out that there really isn't any need to reinvent the wheel and that citizens in other states (ie, Proposition 13, California) had indeed been successful at putting referendums for REAL property tax reform on their state ballots.

I asked if anyone knew how many signatures are required to get an initiative or referendum on the Texas ballot – no one knew the answer to that. So, I did some research when I got home and that is when I found the answer – it cannot be done! I followed up with a note to my friend and distribution lists the next morning to let them know what I had found (see below). I have no faith that our Legislature will deliver property tax relief to Texas citizens. Therefore, we need to deliver it to them.

But, first things first. It will be very important for Texas citizens to have I&R rights. I woke up this morning with a whole new passion – and, it’s called Initiative & Referendum Rights for Texans. We CAN get that done and then we deliver our own mandate for property tax reform to the Legislature LONG BEFORE they get off their duff and do anything meaningful. It's pathetic I tell ya, totally pathetic! I would really like more citizens to become aware of this Initiatives and Referendum for Texas movement that is gaining a groundswell of support, and would really appreciate any help in getting the word “out there."

Here is the email I distributed to many of my friends and email contacts the morning after the meeting:

During last night’s meeting of disgruntled, disenchanted, and outright angry Hays County property tax payers, I asked the question regarding how many signatures are required to place an Initiative and Referendum on the state ballot. I have researched that question and the apparent answer is that it CANNOT BE DONE. Texas DENIES its citizens the right of initiative.

I found the following website where (with a valid voter registration number) you can sign a petition that calls for voter access to binding statewide Initiatives and Referendums on constitutional amendments and state statutes and FURTHER APPRISES the Texas Legislature in the 2009 session of the urgent need to schedule an election on a constitutional amendment that would prescribe these I&R rights for the Texas voter. In addition to signing the petition, there is also a “Tell Me How I Can Help” tab at the upper right corner and at the bottom of the page. http://www.initiativefortexas.org/ I have little faith that our Legislature will ever deliver meaningful tax relief for Texas property owners.

After years and years of legislative sessions and special sessions, you can see what our state government actually delivered and touted as “school finance reform” and “property tax relief." I believe Texans will only get true property tax relief when the Texas citizens DELIVER IT to our Legislature and not vice versa. For that very reason, I am a supporter of Initiative and Referendum Rights for Texas. Please check out the website, sign it, and pass it on!

Linda Morgan retired from high-tech in Houston in 2002 and headed for the hills. She is a member of the Hays County Texas Master Naturalists Chapter through which she has learned a great deal about the conservation of our natural resources and the ever-increasing growth/development issues. Ms. Morgan is a big proponent of school finance reform and real property tax relief for Texans. She is a real estate agent and remains active in the real estate market.

On PEC's Patronage Capital And Capital Credits

By Linda Kaye Rogers

The National Rural Electric Cooperative Association Capital Credits Task Force Report (January 2005) states:

“Establishing a capital credits policy is one of the most important responsibilities of a cooperative’s board of directors. There are good reasons to retire capital credits. It provides tangible evidence of members’ ownership in the cooperative and demonstrates the difference between cooperatives and other organizations. Since the fund's members invest in the cooperative do not earn dividends or other financial remuneration, retiring capital credits is a way to ensure that each generation of members pays its own way by providing its own equity.”

One of the agreements in the lawsuit settlement was the “retirement” of $23 million in capital credits, a return, or credit of monies, to members. This particular return will be as a once-a-year-credit on our electric bill for the next five years. Quickly note that doing this as a bill credit saves the co-op money in handling and postage. The Envision software will handle the whole process.

While everyone is excited about “finally” getting a capital credit refund, there is little understanding of the possible consequences of this action. General Manager Juan Garza has expressed concern that it may create the need to raise cost of service. As a member, this is not what I want to hear! And if you’re like me, you want to know WHY.

There are a number of things to review to understand this dilemma. The first is, where this money comes from. Almost all money into the co-op comes from members, that's bill payment, membership fees, etc. Our greatest expense, about 70% of the whole budget, goes to buying power. Operating expenses is the next largest, and then we have some interest charges and debt repayment. What is left is called Net Margin. At the end of the year this Net Margin is translated to Patronage Capital on PEC's Consolidated Report. What is not included in this picture is the investment into our equity. Our current equity is about $1 billion. We are in one of the fastest growing areas of the nation. With that growth comes the demand not only for more power, but more lines and more stations for distribution.

On paper we have a total of about $226 million in Patronage Capital. But this is on paper. There is no actual fund that has $226 million sitting in it. This money gets reinvested into the co-op, particularly in the infrastructure. It is used to help absorb some of the increases in expenses, such as our purchase cost of power. And this is a big one right now. Some may be used to decrease our debt. In short, it all goes back into the co-op.

So, when we pay out a capital credit, it means less in the Net Margin. In order to meet growth demand, we may then have to borrow. In my reckoning, this is robbing Peter to pay Paul. And it is one reason we may have to have rate increases.

This is a far more complicated accounting maze than I have presented here, but this is the gist of it.

For most of us, the credit return on an annual basis would be a very small amount. You can call PEC at any time and they will tell you your annual credit.

Eric Stratton, a board candidate in District 3, has offered this solution. He calls it “paper credits." He proposes an annual statement given to each member that would show their earned equity in their membership (capital credit) and that is has been RE-invested into the cooperative to ensure continued lowest possible rates and reliable service. Personally I find this agreeable. Service and low rates are the two most important products of our co-op. This “reporting” tracks the member’s equity credit and continues to foster the member ownership of the co-op.

This is an issue that the Board and members will have to address in the very near future. With the new openness of records, information, and ability for members to have input, this is the perfect opportunity for members to be heard. The PEC website (pec.coop) has a “contact us” section. I will be asking them to set up a link for “member input." You’ve ask that members have more say . . . go for it!

Thank you to Eric Stratton for sharing his NRECA information and proposal for member consideration.

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.

Respect And Appreciate Our Local Activists

Opinion

By Rocky Boschert

Every Wednesday night at 6 PM a group of anti-war activists get together at the Square in San Marcos to protest the continuing occupation of Iraq. This is the Iraq occupation that originated with the 2003 invasion that was sold to the American people using propaganda, false association and misinformation. The San Marcos Iraq war protesters have been out on the Square every Wednesday night since early 2003.

It is commendable how this small group of persistent anti-Iraq war activists get out there every Wednesday night amid both honks of support and verbal abuse of disapproval. I remember the years during the Vietnam War that I did the same thing, only with less energy and with not the purest of motives.

It is important to understand that today there is a large part of the American population which lives and thrives just outside the system, sort of hidden activists if you will. The San Marcos Iraq war protesters are part of this American phenomenon.

By definition, these “clandestine” American activists generally don’t believe what the government tells them, and they don’t automatically accept what doesn’t fit into their own thoughtful sense of right and wrong. They live their lives with the realization that most greed is ultimately meaningless, that most war and violence are hopeless responses to hate and vengeance, and they believe all living things have rights and deserve respect.

During the last few decades, these covert American activists have been called by other names, generally by the people the activists are targeting. Here are some of the labels they endure:

Dissidents, revolutionaries, rebels, lefties, commies, advocates, liberals, constitutionalists, artists, intellectuals, labor organizers, home schoolers, libertarians, alternative educators, multi-culturalists, free jazzers, rock and rollers, muckrackers, unionists, community organizers, demonstrators, corporate whistle blowers, progressives, vegans, vegetarians, tree huggers, environmentalists, trial lawyers, radicals, traitors, and troublemakers, among others.

For the most part, these activists primarily seek one thing – justice. Not the law, mind you, but justice. And they seek justice for all, not just for the privileged and the educated.

Today, it seems activism is tolerated as long as it doesn’t interfere with our adult toys, our big houses, our Cancun vacations, and our sports manias. Yet whether we are talking about today’s eco-activists, labor activists, consumer activists, political activists, investor activists, anti-globalization activists, pro-choice or pro-life activists, veterans’ activists, minority activists, or community activists -- activism should be revered as a healthy and necessary American pursuit.

Speaking to their courage, activists stand up and risk their livelihood and sometimes their lives when everyone else is too scared or too beaten down by the system to speak out. When America starts chastising our “activists," it is a sign America has lost its soul. When a majority of Americans think activism should be outlawed, we are no longer a democracy.

So the next time your drive by those “kooky” anti-war activists at the Square in San Marcos some Wednesday evening, just remember they are the ones who indirectly warned you back in 2003 about $4.00 a gallon gasoline, when Halliburton’s stock price was $10.00 a share on the eve of the Iraq invasion. As of this writing, Halliburton’s stock price is $49.83, almost 400% higher. Coincidence? I don’t think so.

To me, in the end, the San Marcos Iraq war protesters are also American heroes. They are telling us what we are afraid to admit: Because of fear we allowed ourselves as citizens to be duped. Five years later almost 4100 American soldiers have died and over 25,000 Americans have been maimed. Yes, we acquiesced to the Pentagon economy and its war advertising campaign.

We should thank the San Marcos Iraq war protesters for their love of America as well.

Rocky Boschert has resided in Wimberley since 1993. He currently serves as board president of the Katherine Anne Porter School (KAPS) in Wimberley. Mr. Boschert owns and manages Arrowhead Asset Management.