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Local co-op's expenditures are questioned

Tuesday, January 21, 2003

SIKESTON - "I just hope that board members are aware that people are asking questions," said Dr. Sheila Perry, a member of the SEMO Electric Cooperative and spokesperson who posed many of those questions at the cooperative's board meeting Monday.

Perry then proceeded to ask about expense reports from 1997 through 2001, about reductions in staffing of the Bloomfield office and on the cooperative's business procedures. SEMO Electric Cooperative is a member-owned company that provides electric services to areas of Scott, New Madrid, Mississippi, Stoddard, Bollinger and Cape Girardeau counties.

Flipping through pages of notes, Perry, who also serves as superintendent of schools for Bloomfield, said there were concerns about expenses listed for board members and the director. She noted in 1997, there were two months where more than $2,000 was paid in mileage, an additional $2,000 plus in motel expenses along with $1,742.32 in credit card and other expenses to the director. Also she cited several other years with similar expenses reported.

"We just have some questions on how much you are spending on trips and stuff," said Perry. "Could these monies be better spent helping some of the families during cold months?"

In response, Clyde Hawes, who serves as the board's director, explained such costs are incurred for meetings attended by the director and board members. In addition to paying mileage, the costs of overnight stays, meals, daily stipend and any other related costs incurred are covered by the cooperative.

Asking if the receipts are provided for these payments, she was told a committee reviews the receipts before the board approves expenditures. Other board members can also request to see these receipts.

"We know what they are for and we can explain them," said Hawes, who also pointed out the board is audited annually.

When Perry requested to see these bills, she was advised by the board's attorney, Rod A. Widger, a member of a Springfield law firm who works with several cooperative boards in the state, that he would not recommend the bills be turned over.

"It is not good for the whole membership to be conducting a fishing expedition through the records," said Widger. He said the members of the cooperative elect the boardmembers and they are the ones who should review the bills and make the decisions.

After the mention of auditors, Perry also questioned why the cooperative employed two auditors. Reuben Jeane, cooperative general director, explained the accounts are separated by management salaries and union salaries. He said this was necessary to keep management salaries confidential.

Her concerns about some cooperative members being shifted to AmerenUE accounts were eased when the board pointed out that although the plan was discussed several years ago, it was voted down. Perry then suggested that such decisions be publicized.

Hawes and other board members explained to Perry and other citizens attending the meeting that the board seeks to provide low-cost electricity and quality service to the membership. During economic downturns, such as in the past year, the board has sought ways to cut costs, including contracting some jobs rather than using cooperative employees when a contractor was less expensive, Hawes said.

Perry expressed concern that these moves were costing local employees' jobs, in turn hurting the local economy. She mentioned the effort to reduce the Bloomfield satellite office.

The board pointed out that while they had cut the staff to one person, there are now two people at the office.

"We try to keep as tight a rein as we can. These 12 men sitting here try to keep expenses in line. What we save for the cooperative we pass on to the customers," said Hawes.

Another boardmember added that with the stagnant economy, changes must be made.

Perry said she and others disliked some of the changes, such as billing done by a St. Louis company rather than locally, which means fewer local jobs. Boardmembers said the change was made because it could be done more economically by the company.

"But the personal touch is gone," countered Perry.

Questioning the funding of recent dividends, or capital credits, the visitors were assured no money was borrowed to fund these payments. However, money was borrowed for the rebuilding of lines, the general manager said.

As the presentation began to come to a close, Perry expressed her concerns about accessibility to meetings and information about the co-op's operation.

"We spend about $14 million a year," said Hawes. "This board is trying to manage things. We take this as serious business. We are not a 'yes board' but we are looking out for our customers."

Perry promised to report to others what she had learned in meeting with the board, but walking out added there are many questions still to be answered.