Trustee calls out co-op Trustee says bids
Charlie Wagner has won a few, and lost a few, in his battles to get the Socorro Electric Cooperative to operate under greater transparency and conduct its business, in his words, “the way it’s supposed to.”
The District 5 trustee from Magdalena was on the attack again during the co-op board of trustees meeting on Jan. 26. This time, the fight was over fair trade and the co-op’s practice of hiring vendors without a bidding process.
The subject first came up at last week’s meeting when Richard Lopez, acting as the co-op’s interim general manager, asked the board’s permission to negotiate an agreement with Trans World Network to sublease tower space and a building atop “M” Mountain.
Lopez had reported at December’s board meeting that Trans World had offered to sublease the space for five years at $3,600 per year. He said the co-op could also benefit by saving money on its own Internet service through Trans World.
In the meantime, co-op attorney Dennis Francish had looked over the contract and found nothing objectionable.
But Wagner objected. He wanted to know if other Internet providers had been contacted about leasing the property and what the “going rate” was for such a lease.
Lopez responded that what Trans World was offering was $200 per year more than what the previous customer, Alltel, had been paying.
“It would be good to compare this with what’s out there in the marketplace,” Wagner said. “We need to compare prices.”
Two other trustees, Prescilla Mauldin and Luis Aguilar, agreed, but a motion to allow Lopez to proceed with the agreement was approved 5-3, with Leroy Anaya, Jack Bruton, Milton Ulibarri, Dave Wade and Donald Wolberg voting in favor.
Objection Overruled
Later in the meeting, Wagner grew more agitated during discussion of an agenda item to rehire Bolinger, Segars, Gilbert and Moss to do the co-op’s 2010 audit.
Lopez reported that the Lubbock, Texas, accounting firm had quoted a price of $28,000. He said in recent years the firm had done the work for between $25,000 and $26,000, but the company was paid more last year because it had to do additional work following an investigation into financial irregularities.
“Are there any other bids?” Wagner asked.
When told no, Wagner objected.
“We have to start doing that. We had two potentially serious fraud situations last year,” he said, and referred to the matter of two managers being fired over alleged abuse of the co-op’s loan policy and the case of one of them, former General Manager Polo Pineda Jr., receiving a personal loan from a company that contracts with the co-op.
“I don’t think we can go on making silly mistakes,” Wagner said, reminding board members of their titles as trustees. “This is not our money.”
When the board voted to accept the bid from Bolinger, Segars, Gilbert and Moss, Wagner cast the lone vote against.
“I oppose and I protest,” he said angrily, and then promised to contact federal authorities about the matter.
Accountant-ability
Wagner told Jack Moss, one of the senior partners in the accounting firm, that he meant no offense against him or his firm; his complaint was that the co-op board should be utilizing a bidding process before awarding contracts.
In arguing his point, Wagner cited the Public Company Accounting Reform and Investor Protection Act, also known as the Sarbanes-Oxley Act, which set new accounting standards for public companies. One of those standards, Wagner said, was that accounting firms should be changed every three years.
While the law may not apply to co-ops, Wagner said it at least represented a practice of “good governance.”
Moss said the board was welcome to seek other bids, but politely defended his firm’s 11-year record with Socorro Electric. He noted that his firm discovered the financial irregularities and reported them to the board president last spring. An additional audit by an independent firm found no additional discrepancies, he said, and the personal loan between Integrated Technologies Group and Pineda took place outside the purview of the audit.
“We want your confidence. If we don’t have your confidence, frankly we don’t want your business,” Moss said. “Our cards are on the table … face up.”
Wolberg spoke up in defense of the accounting firm and spoke out against Wagner. He called Wagner’s assertions “nonsense” and accused him of posturing.
“Enough’s enough. We have to move ahead,” Wolberg said, adding that Bolinger, Segars, Gilbert and Moss was “perfectly competent.”
In Other Business:
• Wagner reported that the board had approved a settlement agreement with former co-op employee Kathy Torres as presented by attorney Lorna Wiggins, who is representing the co-op.
Wagner said the amount of the settlement would not be disclosed but was in keeping with state law.
Torres, who was fired as accounting/office manager last August, had filed a lawsuit against the co-op seeking nearly $11,000 in back wages, interest and court costs.
A month before she was put on administrative leave, Torres filed a complaint with the Equal Employment Opportunity Commission charging that the board of trustees did not act on accusations she made against Wagner for sexual and racial discrimination.
• Lopez, who served as the co-op’s interim general manager for the last five months, was presented with a plaque distinguishing his service to the National Rural Electric Cooperative Association’s International Foundation when he traveled to Haiti to help restore power following the earthquake there in January 2010.
Lopez also received tribute from co-op President Paul Bustamante and a few of the trustees for the job he did filling in as general manager. Lopez has now returned to his position as operations manager.
Bustamante also thanked co-op employees Sophie Chavez, Eileen Latasa and David Montoya for taking on added responsibilities since last August when two co-op managers were fired.
• The board approved a resolution, upon request of the USDA’s Rural Utilities Service, stating that it was hiring Joseph Herrera as general manager. The resolution states that Herrera has a 90-day probationary period and his contract is for one year. Herrera started his new job this week.
• The board agreed to pay moving expenses for Herrera by advancing him $10,000. He will be compensated for the receipts he turns in.
• The board approved out-of-state travel for Herrera to attend the National Rural Electric Cooperative Association annual meeting the first week of March.
• The board set the time for the annual meeting on Saturday, April 9, at Finley Gym in Socorro. Registration will take place from 5 to 7 p.m. and the meeting will start when registration ends.
Contact T.S. Last