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Carroll Electric and Making the Connection

Dear Concerned Carroll Electric Members and Supporters,

While some of you may have read the following editorial by Dane Schumacher some may not have seen it. With the CECC Annual Members Meeting approaching next week, we think Dane’s editorial captures our concerns with our co-op in a clear, succinct way and bears repeating.

Although the Annual Members Meeting, held on a Thursday morning, is scheduled for the convenience of the staff and board and is understandably an inconvenient time for working members, we nevertheless encourage everyone to make every effort to attend. Whether you are denied the right to to speak, or agree with what is said, your presence makes a statement and the more people who attend, the more powerful that statement will be. We hope to see you there on Thursday, May 26 at 10 am (registration 9 am- ID required), at the Carroll County Fairgrounds north of Berryville.

Cooperatively,

Gordon Watkins, gwatkins@ritternet.com 870-446-5783
Randy Janowitz, randy@randyjanowitz.com 870-446-2176
Dane Schumacher, wild_firefarm@yahoo.com 870-545-3120
Editorial – Making the Connection, Part 2

Wednesday, May 11, 2011
Lovely County Citizen

Some readers may remember a television game show, To Tell the Truth, which featured four panelists who questioned three contestants who all claimed to be the same person with an unusual occupation. The real person swore “to tell the truth” and the other two contestants pretended to be the real one. After panelists cast their votes, the host would ask “Will the real [person's name] please stand up?”

This sort of situation has been playing out between members and their electric cooperatives for some time now, nationwide. Co-op members in many states are asking their individual co-ops to take a stance, be straightforward, transparent and tell the truth about who they are. Members want answers to many questions, i.e., why aren’t co-ops returning their capital credits? (Co-ops controlled about $30 billion in member equity, 2008 data) Why aren’t membership lists and minutes open to members? Why are board meetings closed?

Finding answers to these questions has been no easy task, particularly when some co-ops are entrenched in decades of nepotism and/or run by a board that “rubber stamps” management recommendations. To make matters worse, some members who are persistent in asking questions challenging their co-ops’ decisions are marginalized for doing so, called protesters, and/or told to contact the co-op’s attorney. Clearly, these actions do not reflect the nature of a true cooperative identity.

Since legal loopholes exist, cooperatives have been able to insulate and protect themselves from any real oversight by outside agencies or their own supposed members and owners. Co-ops can function interchangeably as a monopoly, a nonprofit, a corporation, a utility company and/or a co-op, depending on the inquiry and which identity suits them at the time.

A co-op’s 501 (c) (12) tax exempt status lends clarity to the prevailing co-op identity crisis. These types of organizations must be democratically controlled (one member/one vote), subordinate capital, operate at cost, and allow for the distribution of any profits (margins) to members based on their electrical use. Members are patron members and actually own and control the cooperative.

Members, as owners, elect a board of directors who make, alter, amend and repeal the by-laws. The board then hires a manager and chief executive officer to hire employees to run the organization. The crux of cooperative governance by members is the one member/one vote process. It is the one mechanism, that if instituted and implemented properly, gives members a chance to truly hold their co-op accountable and actively participate in setting policy. If there is no real democratic election process of the directors, members don’t stand a chance.

At Carroll Electric, the odds are indeed against its members.

It’s surprising to learn that even though Carroll Electric’s board of directors supposedly works for the members, and is accountable to the members for decisions made on members’ behalf, most, if not all, board members have been appointed by Carroll Electric, not “elected” by members. These longstanding board members have created a set of by-laws that virtually prohibit member participation in board elections.

Carroll Electric’s board members are compensated generously. Directors are paid anywhere from $90 to $180 per hour. The CEO’s total compensation is currently $315,643, and some portion of this is subject to the board’s approval. One wonders if this seemingly excessive pay breeds a loyalty to the board itself, and to management.

As long as Carroll Electric appoints and compensates its board just like a corporation, and continues to operate in a closed door fashion all the while paying lip service to cooperative principles, members will continue to challenge policies, seek the truth and ask, “Will the real Carroll Electric please stand up?”

All members please plan to attend Carroll Electric’s annual meeting on Thursday, May 26, at 10 a.m. (registration 9 a.m.) at the Carroll County Fairgrounds.

Dane Schumacher

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