Co-op seeks new legal counsel
Socorro Electric Cooperative will begin the process of seeking new legal counsel by holding a special meeting on Oct. 12.
District 3 Trustee Milton Ulibarri raised the issue of replacing the co-op’s current attorney, Dennis Francish, at the co-op’s board of trustees meeting on Wednesday.
“Mr. Francish’s contract will be expiring on the 31st of December. We should start advertising for an attorney so we have a smooth transition,” he said.
Ulibarri said at last month’s meeting that he was misled by Francish more than a year ago when he and the rest of the board voted to file a lawsuit against all of the co-op’s approximately 10,000 member-owners to challenge three bylaws that call for the co-op to operate with greater transparency. The co-op lost the lawsuit and now faces a countersuit that charges Ulibarri, eight other trustees and five former co-op officials with fraud and breach of fiduciary duty.
Trustees Donald Wolberg and Prescilla Mauldin, also of Socorro’s District 3, offered input on the subject. Wolberg suggested that hiring an “in-house” attorney might be a viable option and could save the co-op money. Mauldin said it might be worth looking into hiring someone who works for a flat fee, instead of billing by the hour.
Trustee Wagner, who has been critical of Francish from the beginning and is listed as the representative of the class in the countersuit, which requests class action certification, then made the motion to start planning for the hiring of a new attorney.
“I’ll motion that the board consider a plan to recruit and review qualifications for the possible appointment of an attorney to represent the cooperative, and in that process use a point system that gives a higher value to local attorneys, as opposed to attorneys from Albuquerque or Santa Fe or someplace else.”
“I agree with him,” said Ulibarri by way of seconding the motion. “I think we should keep our business in Socorro.”
Co-op President Paul Bustamante said a special meeting might be needed to set the criteria for the hiring, determine how the position would be advertised and set a timetable so they’d have an attorney by the start of next year. With that, Wagner amended his motion to set the date for the special meeting for that purpose on Wednesday, Oct. 12. The motion passed unanimously.
Francish, an Albuquerque attorney who previously did a two-year stint as the co-op’s attorney, was hired under divisive circumstances at a special meeting held on Dec. 28, 2009. The meeting allowed three lame duck trustees to participate in the decision, depriving the three new trustees that beat them in district elections the chance.
Francish was given a two-year contract that pays him $190 per hour and he’s reimbursed at 55 cents per mile, plus gross receipts. He’s also entitled to expenses and/or reasonable per diem for attending seminars and meetings at which business pertaining to the co-op is addressed.
After member-owners of the private, non-profit corporation passed a bevy of reform-related bylaws that aimed to reduce the board’s expenses and increase transparency in April 2010, Francish told the board he could “make a case” that the three bylaws that addressed transparency did not and could not apply to cooperatives. The board then voted to challenge the validity of the bylaws in court, which required the co-op to sue its own members.
Largely due to the lawsuit, the amount of money the co-op spent on attorney fees more than doubled. Francish was paid $96,346.76 over his first 18 months on the job. By comparison, the co-op paid attorneys $40,533.30 for legal services in 2008 and $35,939.13 in 2009.
In Other Business
• Duane Baker, director of Puerto Seguero day shelter, proposed that the co-op set up a program to assist people in paying electric bills, similar to PNM’s Good Neighbor Fund.
The proposal was well received but the board wanted more details. The item will be placed on the agenda for this month’s meeting.
• The board approved a Memoradum of Understanding with New Mexico Tech for fiber optic lines. Herrera said the agreement is similar to the ones the co-op signed with the city of Socorro and Socorro County earlier this year.
• The board approved the purchase of a bucket truck from All-Tech Manufacturing at a price of $189,720.
• Herrera pointed out a mistake made on a USDA Rural Utilities Service Form 7 last spring inaccurately portrayed the co-op’s financial status for the month of August. He said the error was supposed to be corrected in April but was overlooked. Consequently, the August report reflected a loss when there was actually a gain.
Herrera said the co-op has continued to reduce expenses and is having a profitable year.
“Overall for the year, our margins are above what they should be and we’re more than meeting our tiers,” he said.
• Herrera reported that an investigation into an outage that occurred at the Bernardo substation on Aug. 25 has resulted in more training for crews affiliated with both Socorro Electric and Tri-State Generation and Transmission, Inc. which owns the substation.
• The board elected voting delegates for the National Rural Electric Cooperative Association’s Region X meeting. Leroy Anaya will represent Socorro Electric at the meeting and Leo Cordova will serve as alternate. Cordova will be the delegate for Cooperative Finance Corp. and Federated Rural Electric Insurance Exchange and Anaya will be the alternate for both.
• The board set its next regular meeting for Wednesday, Oct. 26, at 5:30 p.m.
Contact T.S. Last