Directors sue PEC to stop election plan

By Lew K. Cohn
Managing Editor
The Highlander
Two Pedernales Electric Cooperative (PEC) directors are seeking a permanent injunction against the rest of the board and the Johnson City-based cooperative as a whole to prevent implementation of single-member districts this year.
Directors Cristi Clement of Burnet County and Kathy Scanlon of Travis County have been joined by Burnet County resident Thomas Mitchell in the lawsuit, which was filed Dec. 29 in Hays County District Court.
Last August, the PEC board voted 5-2 to create single-member districts in which only members who live within a district may vote for the director from that district. They also created a different quorum requirement for election of directors than that required for the annual PEC meeting, which is when director elections have traditionally taken place.
Previously, PEC members voted for directors at large at the annual PEC meeting with a quorum requirement of 5,000 members of the cooperative.
Under the new rules, election of directors requires at least “one thousand (1,000) votes cast in each individual district if the vote being taken regards the election of the director of that district by the members of that district,” according to the amendment adopted at the Aug. 15, 2016, board meeting. Directors are then elected if they receive a plurality of the vote once the 1,000-vote district quorum is met.
Voting in favor of the changes at that time were PEC Board President Emily Pataki of Williamson County, Vice President James Oakley of Burnet County, Secretary-Treasurer Paul Graf of Comal County and directors Amy Lea SJ Akers and James Powers, both of Hays County, where the suit was filed. They are the defendants in this lawsuit filed by Clement, Scanlon and Mitchell.
The plaintiffs claim the defendants “have exceeded their power and authority by amending the PEC’s bylaws to provide for single-member district director elections and to lower the quorum requirement for director elections,” according to the lawsuit.
They call attention to the Texas Electric Cooperative Corporation Act, which gave cooperatives the right to organize and operate and is now codified into Chapter 161 of the Texas Utilities Code. The plaintiffs claim that according to Chapter 161.070 of the code, “[e]ach member present at a meeting of the members is entitled to one vote on each matter submitted to a vote at the meeting.
“It was therefore beyond the power of the defendant directors to amend the bylaws to provide that only certain members may vote for particular directors,” the lawsuit states. “Because PEC’s articles of incorporation require 5,000 members to constitute a quorum for the conduct of business, it was beyond the power of the defendant directors’ to amend the bylaws to require a quorum of only 1,000 members to vote in a director election.
“Based upon the above facts, Plaintiffs are entitled to a permanent injunction preventing Defendants from holding an election for directors that would restrict Plaintiffs from voting for each director candidate.”
In response, PEC issued a written statement which indicated the board believed the implementation of single-member districts to “be lawful and appropriate for the cooperative” and that the board is “ ready to defend the new voting system and respond to the lawsuit.”
“Due to the geographical size of PEC and our large membership, we believe having district representation is beneficial to our members,” Pataki said. “We also believe that increasing the focus on our districts allows for better member communication, representation and interaction.”
The membership of the cooperative did vote twice on the issue of changing to single-member elected districts, including most recently in June 2014 at the annual meeting in Cedar Park. At that 2014 meeting, PEC members voted down proposed single-member districts by a margin of 9,219 to 7,957.
Last month, the cooperative board voted unanimously to approve communications to the membership about the single-member districts before the next Board of Directors election in June.
Vice President of Communications and Business Services Alyssa Clemsen-Roberts said the goal of the plan, which will begin next month, is to inform members of the upcoming election, provide comprehensive education about the new single-member district voting system, encourage member participation in the election and promote and reinforce what she called “the cooperative difference.”
Clemsen-Roberts said PEC will market materials to the membership that will comprehensively explain how the new system works and who is eligible to vote, as well as highlighting the difference from the previous at-large system. The communications will also highlight the directors up for re-election and the districts they serve as well as provide instructions and tools with which members can check their voting eligibility.
The campaign is expected to begin Jan. 9. with an article on the election. Applications for nominations will be offered beginning Jan. 17 and will be taken until March 27. A candidate forum will be held in Johnson City on April 20. Early voting begin May 18 and continue through June 9 with in-person voting at the annual meeting on June 17.
Director seats up for re-election this year are from District 2 and District 3, which are held by Pataki and Scanlon, respectively.