Legal battles lead MEA to consider new role

PALMER -- The Matanuska Electric Association Board of Directors has wrangled numerous times during the past six months over how much control the board should have over legal action taken by the association. While the battles will likely continue at future MEA board meetings, the board is looking into a revamp of their governance policy that may help iron out such struggles in the future.

Board members have repeatedly discussed the ramifications of taking more authority over decisions regarding litigation entered into by MEA. Part of the discussion has centered on the amount of money MEA has spent in the last eight years on litigation.

During the MEA board's March 11 meeting, the board passed a resolution directing MEA management to compile a report of the cooperation's legal expenditures between Jan. 1, 1994, and Dec. 31, 2001. MEA sent out copies of that report to MEA members, breaking the aggregate total of more than $6.6 million in legal fees into three categories -- power-supply related, International Brotherhood of Electrical Workers-related and "other corporate."

Board member Michael Janecek, numerous times since the report came out in April, has requested that MEA management expand the "other corporate" category to list exactly what the $1.8 million that fell into that category over the eight-year period was spent on.

At Monday's meeting, Janecek brought the subject up again for discussion. Before discussion progressed, board president Larry DeVilbiss made it clear a motion was needed for further consideration of the issue.

"If we want to do more with this, it's a new motion [that's needed] -- it's a new board," DeVilbiss said, pointing out that the original motion regarding the legal expenses had been passed before MEA's annual meeting, before two new members were seated on the board and before DeVilbiss was voted in as board president.

Board member Lois Lester made a motion to expand the litigation breakdown by adding name, amount and reason for the litigation under the "other corporate" heading.

MEA's general manager Wayne Carmony said the motion could put the corporation at risk by revealing information covered through attorney/client privilege, and the board eventually agreed unanimously to receive the information confidentially in executive session in November.

During the discussion, Lester brought up a concern she has raised at previous meetings about how much control the board has over matters of litigation.

"The board has no authority whatsoever as far as legal action is concerned," Lester said. She added that the board gets taken to task by members and in the media for the amount of money spent on litigation, therefore they should have some control over legal decisions.

DeVilbiss said the board did have the power to stop legal action -- a power that was discussed at the September board meeting when board members voted on whether or not to continue IBEW-related litigation. That motion failed. The power DeVilbiss mentioned came up again during the October meeting when board member Scott Daugharty made a motion to stop efforts to appeal the Waterman vs. MEA case, which revolves around whether the board has the power to refuse to seat a board candidate who they believe violated MEA's campaign disclosure requirements. That motion failed by a tied vote, with Daugharty and Lester voting in favor of dropping the appeal and board members Jim Hermon and Bill Folsom voting against.

At the meeting, DeVilbiss addressed Lester's concerns by stating that decisions regarding litigation was a matter that could be addressed through looking at a new governance policy. Board members stayed after the meeting's adjournment to hold a workshop to discuss a new form of board governance, based on the Carver Guide.

The Carver Guide, a policy governance guide created in the mid-1970s by John Carver, suggests 10 principals of governance geared to make clear a board's role in governing a corporation. It emphasizes a broader approach to board governance, in which policy decisions are the focus of the body and not day-to-day decisions. It's a method of governance that was adopted by the Matanuska Telephone Association last year and is presently being considered by the Matanuska Valley Federal Credit Union.

A significant amount of work would be involved in changing the MEA board's method of governance. Bylaw changes would be needed to adapt to the new philosophy of oversight, and the board would spend considerable time evaluating its goals for the association. But DeVilbiss said the MEA board is not charging ahead to change at this point, although interest is there.

"We're easing into it," DeVilbiss said. "I was amazed -- everybody's interested in pursuing it at this point -- but nobody's committed. We want to know where we're going to actually end up before we make the jump."

Evidence of the interest, DeVilbiss said, can be seen in the board's decision to authorize DeVilbiss to find out how much it would cost to bring someone in to walk the board through the process of restructuring.

DeVilbiss said part of the appeal of the governance model is that it would allow the board to delegate the minutiae to staff -- minutiae that he said the board seems to be getting bogged down into at meetings.

"Part of this governance model is that it enables us to draw those boundaries," DeVilbiss said. Matters such as how involved the board should be in matters pertaining to litigation, for example, would set out in the initial policies of governance.

"It will certainly clarify that," DeVilbiss said. "It's something that needs to be clarified. Technically, the board can do most anything it wanted to right now."

DeVilbiss added that the governance model is one that he saw in use when he attended training at the National Rural Electric Cooperative Association shortly after he was elected.

"It's not a flash in the pan," DeVilbiss said.