By Larry Landaker, Publisher, PECTruthwatch
Legal action was taken on behalf of concerned member-owners whose voting rights may have been critically diminished by a majority vote of the PEC Board during an August 2016 meeting. The two Directors filing suit, Cristi Clement and Kathy Scanlon voted against the August resolution. The are joined in the lawsuit by PEC member Thomas Mitchell and are represented by attorney, Randall Buck Wood.
The voting rights of PEC members are protected under Texas Law, in the Utilities Code, Chapter 161. The law says, “Each member present at a meeting of the members is entitled to one vote on each matter submitted to a vote at that meeting.”
Today the majority of PEC members are ineligible to vote in the upcoming 2017 election. Only members from District 2 and 3 will be allowed to vote. Thus, the remainder of the membership is disenfranchised from a vote to which they are entitled under the law.
It would appear that the Board exceeded its authority when they UNILATERALLY changed the PEC election rules.
Under current Texas law, members should be entitled to enjoy full voting rights. PEC members have voted on this matter twice, in 2011 and 2014 and both times REJECTED a change in the at-large voting system. In supporting the at-large system, members voted, in essence, to hold all seven (7) directors accountable for cooperative business.
Under the plan approved by the Board last August, members can vote for only one (1) director every three (3) years, thus leaving members with significantly diminished control of the Board.
It is unclear whether PEC lawyers (both the outside general counsel, Don Richards and the General Counsel, Don Ballard advised the Board of the law before the board took action, or whether the board simply chose to ignore it. In any event, it is incumbent upon counsel and the Board to protect and maintain strong democratic member control of their own cooperative. The resolution passed last August negatively impacts democratic member control.
The lawsuit now places in doubt the question of if or when the cooperative will change its voting system to single-member districts, a matter that will apparently be decided in court. The next election of board members is scheduled for June 2017.