— from Alex MacLeod —
The decision last week by the OPALCO Board to disqualify Dwight Lewis’ board candidacy in the upcoming election stabs at the heart of what it means to be a cooperative.
Dwight has lived on Lopez since 1974 and has more than 40 years of OPALCO membership. He’s run a successful business, contributed his time and energy to the Lopez community and been an active OPALCO member, attending board meetings regularly for many years.
Dwight’s not your button-down, necktie-wearing, go-along-to-get-along kind of guy. He’s an independent thinker who questions authority and conventional wisdom, sometimes in excess. But in wanting to serve as an OPALCO director, he wants a few simple things:
- A return to the days when OPALCO managed expenses and kept rates as low as possible while maintaining good electric service to the islands.
- To return a sense of trust and transparency to a board that has shown little of either in the past several years as it’s driven up debt, paid its general manager excessively, done much business behind closed doors and raised our rates 34% over just the past five years.
- And for an independent financial audit to be conducted of the cooperative’s books over the past three years, in particular to provide members with an independent analysis of the costs of OPALCO’s Internet venture, its relationship to debt and the costs to the membership. The board made many promises about Rock Island when it took it over, but has provided little detail since.
Despite turning in a petition with more than 400 signatures from the Lopez district, the board’s Seattle lawyer disqualified him from the ballot. As OPALCO said in its press release, the lawyer “called into question the petitioner’s ability to put aside his personal agenda for the good of the cooperative…”
The simplest translation is this: Dwight wants to work as a board member to accomplish the three items above, his “personal agenda,” and management and the other board members want none of it.
Anyone who has followed OPALCO management and its board (as I have) has come to realize it brooks no probing. It is a board of toadies who nod affirmatively at whatever management says, despite the cost to the membership. The level of management-driven group-think has been embarrassing to witness.
I suppose we could all live with this were it not for the fact that the average monthly bill for electricity has risen to more than $152 from $114 in 2014. That means each of us, on average is paying $406 a year more for about the same amount of electricity.
Worse, the board paid our general manager, Foster Hildreth, more than $360,000 in 2016, the last year it has disclosed his compensation. (If his pay has risen like our rates, it’s probably close to $400,000 today.) This is a ridiculous sum for a small cooperative utility. The head of Seattle City Light is paid about the same, and it is the 10th largest public utility in the country, with almost 2,000 employees (to our 51) and 445,000 meters (to our 13,200). Sure, we’re a collection of islands (as OPALCO reminds us every time our rates increase), but still, be real.
I’m not going to speak for Dwight — only a fool would presume to do that — but he is being treated most unfairly by OPALCO’s management and board. Whether he serves as a board member should be left to the membership, not management or the board. If you care about OPALCO, it is time to speak up.
Alex: As I read your post, the question in my head was: Why isn’t Dwight writing this post in his own voice?
You last paragraph answered my question: …”I am not going to speak for Dwight – only a fool would presume to do that…..
Stop and think.
Populists forget or ignore the fact that cooperatives are first and foremost businesses. The Northwest is littered with crashed cooperatives that lost the simple mantra that the bottom cash flow line must stay black. Yes, OPALCO is a cooperative, but it is a business and no business can afford to be a political plaything.
As to the candidate’s desires defined by a writer who “is not going to speak for” the candidate:
1. Rates as low as possible. The implication is that rates are somehow padded. Most people know that hiring and retaining competent and well equipped personnel with the most reliable equipment available at reasonable cost and able to operate under adverse and in salt water, chemically hostile conditions, is not padding rates.
2. Trust and “transparency” (a word that appears in “Populist Bingo”- ever played it?) are destroyed by the very people who claim to seek it, generally by innuendo and hemi-semi-demi information dressed up to look like the full and sensational story. An example in this case: debt is a tool to levelize huge expenses that if debt were not incurred, nearly every OPALCO member would be insolvent or outright bankrupt as a result of the new submarine cables. Throwing “debt” around as a shiboleth is helpful only if its function is to arouse fear and suspicion. This is NOT an indication of any intent to bring back the days of trust and transparency.
A side note on transparency: Rock Island is a profit entity engaged in a highly competitive business. OPALCO members rooting around in its affairs can only benefit Rockisland’s competitors, whose local employees (no offense intended) are also OPALCO members. Grandstanding on a matter that puts Rockisland at competitive risk harms not only OPALCO’s investment, but also its efforts to bring the people in the county into the 21st century, ultimately willing to go literally the last mile, while its competitors cherry-pick the most profitable local marker areas. Arguing for this kind of disclosure, however politically magnetic, is an abuse of the purpose of transparency. Try going into General Motors with your share of stock, demanding sensitive competitive information in the name of “transparency.”
3. OPALCO is in fact audited every year by Moss Adams, the largest nonprofit/coop accounting firm in the Northwest. They are by definition independent auditors. Demanding an additional “independent audit” both ignores the facts and wildly and irresponsibly attacks Moss Adams … in the name of populism.
Populism sells by the case, but it’s empty calories. Whatever a person’s agenda may be, the OPALCO board’s agenda is to provide policy and oversight to management headed by an unusually capable talent whose salary is independently determined by a national, not local market for such talent. Editorializing about this prson’s salary without context is at best misleading, and for what constructive purpose?
And yes, there is “group-think.” No board member has individual authority by virtue of being on the board. The board acts only as a body, and not as individuals.
The ability to teach and learn from each other is essential to board membership. This is not a job for a white knight to charge in and dictate his or her hazy idea of a complex reality heedless of the risk or actual damge to everyone. OPALCO’s shoulders carry the safety, comfort and economy of this county and everyone in it. Things weren’t simple in the past (in some ways they were possibly hairier), and they aren’t now.
If the board determines that a candidate for its membership is unqualified, it is in a bind: publish its reasoning and endure a suit for libel (which because of the cost of defense, is often settled for that reason alone having nothing to do with the merits but giving to all the impression that libel in fact occurred), or ask its members to trust it as part of the burden of fiduciary obligation that all board members carry, independently of privacy laws or policies.
Stop and think.
Whether a candidate favors philosophies we might support should NOT be the issue! What matters is whether Opalco followed a fair process and had a sound reason for this disqualification.
As a former coop attorney (yes, from Seattle), I strongly believe that part of any director’s legal obligation is to put aside personal issues and act in the best interests of the company they direct. It is therefore a board’s obligation to establish standards for assuring that a candidate will meet that legal standard, and others. Those standards should be valid, objective and applied to all candidates.
Although the ability to act in the best interests of Opalco is a valid standard, before we could form a fair opinion regarding this particular disqualification we would need to know the specific facts that led to the decision. Those were likely personal in nature. If so, it would be inappropriate for Opalco publish the details.
Opalco’s attorney would have known those details. He has an obligation to help keep Opalco out of trouble. I’m confident he would have ensured that there was a sound basis for any disqualification decision. But if the candidate wants to challenge that decision, he can.
Well DARN, I was looking forward to having differences of opinion and divergent ideas coming to our Candidate Forums. And after all that, we could have had a contested election. Mr. Lewis would certainly made this more interesting. I guess that is not going to happen.
So, Mr. Lewis, as a candidate for the Board, has been eliminated, by the Board (not their lawyer). Could this lead us to the point where to be a candidate for the Board, you have to think like the Board and be approved by the Board?
Just as a note: The election for District 4 is a contested election. There are two candidates running for one position. Read up on the them here: https://www.opalco.com/wp-content/uploads/2019/02/Voting-Guide-2019-Final.pdf
Or attend the Candidate forums next week.
Krista, Were both selected by the Nominating Committee that is selected by the Board. I hope not.
A few years ago, I attended several OPALCO Board meetings, including at least one in which Dwight Lewis voiced his rather strong opinions about its priorities and expenditures of funds. While I did not agree with everything he said, he struck me as a legitimate candidate who should have been allowed to run for office, if only to let the members make that decision, and not be arbitrarily excluded from the process. If the Board or Nominating Committee feel that Lewis has a personal agenda that would get in the way of his being an effective representative of members’ interests, It should be more explicit about what those are, rather than the rather muddy explanation we recent received from the PR office. That only sows confusion and suspicion.
And is Foster Hildreth really getting paid close to $400,000? That seems astronomical by San Juan Islands standards. Clarification needed.
If a successful businessman who has lived here for 45 years and has the support of over 400 of his neighbors can’t run for the Opalco board, then who can? Sounds like you have to be pre-approved by the existing board, which redefines a “Co-op” as I understand it.
I too am deeply troubled to learn that the OPALCO membership has been denied the opportunity to vote for or against a Board candidate with a demonstrated record of care and concern for OPALCO policies and has demonstrated support among the membership.
That the present Board and management has taken the steps it has in order to thwart this candidacy suggests an unwelcome intolerance for diverse opinions among Board members.
I believe a healthy cooperative organization can demonstrate its strength by celebrating its diversity rather than squelching it.
This should be disturbing news for all OPALCO members to read. This move effectively eliminates debate and discussion that should happen. Where is the representation for the members who wish to see Dwight Lewis in the running? Why not put out a county-wide survey to get the rest of our opinions? I’m not from Lopez, but I would have signed the petition. All voices need to be listened to, and heard, to improve things for everyone. There may be truths that we all need to face, which is why dissenting voices should never be censored or silenced. I hope that OPALCO board will change its stance on this.
Excluding a candidate otherwise properly petitioned does seem extraordinary. But one must give the Board and its counsel the benefit of the doubt until proven otherwise.
It does seem curious that in OPALCO’s official statement, issued on February 22nd, it was stated “the Board unanimously upheld Counsel’s decison.” Only to state two paragraphs later, (via Board President Dauciunas) “revealing that the three sitting directors who are candidates in this year’s election recused themselves and did not vote.” These statements would appear to be mutually exclusive?
Regarding the comments on executive compensation.
Considering executive compensation in the abstract is neither helpful to stakeholders nor fair to the compensated. The matter of executive compensation is the responsibility of the Board. Thoughtful consideration of said Board would include:
1. Total compensation consisting of cash and non-cash compensation.
1a. In the context of a co-op utility, if non-cash compensation includes use of company vehicles or similar perks – are such perks integrated with the organization’s values? i.e. EVs (electric vehicles) vs ICE (internal combustion engines)
2. Contextual consideration of executive compensation within a peer group of organizations.
3. Organizational performance against previously projected metrics. These metrics would certainly include projections for an acquired entity, such as Rock Island. Evaluation of such metrics would include not only subscribers and revenue, but also operating costs, capex and cost of capital.
Reasonable stakeholder expectations of the Board would include an objective rationale for executive compensation against performance of the organization and relevant subsidiaries.