Socorro Electric president taking the heat
These are tumultuous times for Socorro Electric Cooperative.
An independent auditing firm specializing in forensic audits just completed an examination of co-op books and records in the wake of the discovery of financial irregularities that led to the firing of two managers two months ago.
It was also recently discovered that a mistake in setting rates five years ago caused customers to overpay electric bills to the tune of $1.7 million, which the co-op plans to return in the form of patronage capital. What’s more, it now appears the co-op is in danger of defaulting on federal loans provided by the USDA’s Rural Utilities Service and needs to find a way to make up a deficit in order to meet its margins.
That means rates will be going up, and the increase is expected to hit mid-winter when customers are paying more for heating.
And then there’s the lawsuit. The co-op’s board of directors voted to challenge three bylaws passed at the annual meeting in April. In order to do so, the co-op sued all of its approximately 13,000 customers, who are also the owners of the public, non-profit corporation.
Not surprisingly, many member-owners weren’t thrilled with the idea of being sued, and their trust in the trustees they elected to represent them diminished.
Though the board later voted to dismiss the suit, the matter is still an issue because there have been answers to the complaint and a countersuit that could potentially keep the case tied up in court for years.
At the center of the storm is Paul Bustamante, the co-op president. He’s been blamed for the co-op’s problems, and has been under fire from member-owners. Trustee Charlie Wagner, a leader in the movement to reform the co-op, is calling for Bustamante to be removed from his position as president.
“I’m getting a lot of heat,” said Bustamante in a phone interview earlier this week.
But Bustamante, who has served on the board for a dozen years, the last five as president, is doing his best to withstand the heat and is intent on trying to put out all the fires that surround him. He said there’s a lot of work to do, and he plans to finish out his term as president, which ends in January, and the remaining two years of his term as District 2 trustee.
Bustamante said he’s holding up against the heat.
“I’m OK,” he said. “People on the streets give me moral support … They tell me to hang in there.”
A native of Polvedera, Bustamante said he gets support from people who have known him a long time.
“I used to deliver firewood around here,” said Bustamante, who now works for the U.S. Postal Service. “I was always honest, and people know me.”
Bustamante also seems to have the support of the majority of the board. Aside from Wagner, the trustees haven’t spoken critically of him at meetings and several have defended him.
Bustamante admits it hasn’t been easy for him lately. He’s a single parent, raising two school-age kids. His job has taken him out of town to Albuquerque and Las Cruces a lot recently. With all that’s been going on with the co-op, he’s stretched pretty thin.
But Bustamante, whose father also served on the co-op board, is still committed to the co-op and does his best to stay on top of the many issues it’s dealing with.
Bustamante spoke about some of those issues, including how the co-op is going about solving its financial woes.
Aside from tightening its own belt, the co-op is tightening controls. Uncollected debt is one area that has contributed to the co-op’s financial problems and collecting that debt has become a point of emphasis, he said.
Another area where the co-op’s negative margins can be made up is expenses. Expenses incurred by the board of trustees, which totaled nearly $500,000 in 2009, have been a point of contention for many member-owners, who voted last April to put a $10,000 annual limit for each trustee. As the co-op president, the limit for Bustamante is $15,000.
“The board hasn’t fought the $10,000. It’s going to save us money,” said Bustamante, who saves on expenses by declining to take insurance benefits trustees are entitled to.
But the board did fight three bylaws designed to bring greater transparency to the way the co-op conducts business.
“All we wanted to do was get a ruling on it,” Bustamante said of the lawsuit, which sought to test the validity of new bylaws that required the board to follow the Open Meetings Act and Inspection of Public Records Act and allowed members and the press to attend board meetings.
Bustamante said the board is now transitioning to adapt to the new bylaws, which may help to mend the strained relationship trustees have with member-owners.
“There’s a movement for transparency,” he said. “People are tired of seeing (politicians) getting kickbacks and things. All you can do is hope that good, educated people get elected into office.”
Bustamante said he wants to stay in his position and be part of the solution to the co-op’s current problems.
“Sure, there’s a lot of turmoil. You just have to take the bull by the horns and deal with it,” he said.
Contact T.S. Last