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PEC Board Receives 2009 Audit, Approves 2010 Budget
PEC Press Release
Wednesday, April 28, 2010 • Posted April 27, 2010

Pedernales Electric Cooperative’s Board of Directors received the audit for the 2009 fiscal year during the Board’s regular monthly meeting on Monday, April 19. The accounting firm BKD gave the Cooperative an unqualified or “clean” opinion, which is the best opinion an auditor can offer. The Board also approved a 2010 operating budget, finalizing a move from a model based on forecasting expenses.

Starting with the audit, the Board voted on several measures that attest to the Cooperative’s commitment to fiscal responsibility. Presenting the audit on behalf of BKD, John Rowland said PEC’s net cash provided by operations was $92.8 million compared to $59 million in 2008, and that PEC was wisely using those funds to decrease its need to borrow.

“[PEC is] starting to put more and more from operations into plant instead of having to borrow it, and that’s a very good trend,” Rowland said. “You are generating much more of what you need internally.”

The Board praised PEC employees for their prompt and accurate work in completing the audit.

“This is a pretty clean bill of health and the staff deserves credit for that,” said Board President and District 6 Director Larry Landaker before the Board unanimously accepted the audit.

The Board also voted to authorize PEC to file the Form 990 for 2009 with the Internal Revenue Service. Once the form has been filed, PEC will post the form online at

The Directors also were updated on the internal operations audit conducted by Bridgepoint Consulting. The in-depth audit revealed a significant improvement in control of expenditures, and it lauded PEC’s decision to consolidate district-level purchasing into a more centralized approach. The Board approved Bridgepoint’s plan for continued improvements in 2010.

“This whole process has been so beneficial to the organization,” said PEC Secretary-Treasurer and District 3 Director Kathryn Scanlon. “Not only [is Bridgepoint] auditing procedures, but [they] are coming up with suggestions for doing things better and saving money.”

The Board then approved and adopted an operating budget for 2010, a goal which PEC had been working toward for more than seven months.

“This is another benchmark for us … on the list of things we’re trying to do to improve this Cooperative for the members,” said District 7 Director Dr. Patrick Cox.

Also at Monday’s meeting, the Board announced the 13 Cooperative members running for director positions in this year’s election. Members will elect directors for District 4 and District 5. The candidates, listed in the order they will appear on the ballot, are:

• Director, District 4: Dr. Ted Lehr, Austin; Dr. Geoffrey VanderPal, Driftwood; Ken Rigsbee, Austin; Deborah (Deb) Ballew, Austin; Dan W. Pedersen, PE, Lakeway; Tom Griebel, Austin; Chris Perry, Dripping Springs; Bob Driscoll, Austin.

• Director, District 5: Joe Summy, Johnson City; Ross Fischer, Kendalia; Steven Carriker, Dripping Springs; Thornton Keel, Spicewood; Don Casey, Cypress Mill.

In the monthly operations report, the Board heard about two large-scale, successful electric service conversions in Canyon Lake and Oak Hill. The Oak Hill project involved 65 employees working in 20 to 30 teams over the course of a week. PEC had spent two years preparing for the Canyon Lake conversion, which involved 202 employees and 130 vehicles working to complete a series of tasks in a single day.

During the member comment section of the meeting, members spoke about the Board’s decision to decline a recent offer to purchase the Cooperative, results of the Somerset Guild study presented to the Board in February and the implementation of PEC’s debt collection plan.

In other action on Monday, the Board:

• Approved a resolution authorizing the general manager to negotiate agreements for software necessary for the LINKS project.

• Referred to the Financial Strategies, Contracts and Budget Committee a resolution to adopt a Board risk oversight policy.

• Amended the whistleblower policy.

• Voted to accept a franchise agreement with the city of Lakeway.

• Heard an update about plans for the PEC Annual Membership Meeting on June 19.

• Voted to refer to the Governance, Bylaws and Legal Committee a resolution to authorize a monument outside PEC’s Johnson City headquarters honoring President Lyndon B. Johnson.

• Agreed to a revision of the defined benefit retirement plan funding policy.

• Heard a report on PEC’s improvement in both customer service and overall satisfaction according to a national survey.

The next regular Board meeting will be held at 10 a.m. on May 17 at PEC’s E. Babe Smith Headquarters

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