MTA board must be held accountable

Editor’s note: This is the second of a two-part opinion piece submitted by Chuck Foster, a longtime member/owner of Matanuska Telephone Association who also served on MTA’s Board of Directors.

According to the U.S. Census statistics, the Matanuska-Susitna Borough and Eagle River/Chugach area grew by more than 45,000 residents during the past decade.

In fact, this area is the fastest growing area in Alaska, and one of the fastest growing in the nation. Why then has Matanuska Telephone Association — during the same period of time — lost about 25 percent of its membership? Why has the membership not been made aware of this? This certainly affects the equity of our members (capital credits).

Another financial concern is the exclusion of the underfunding of the MTA employee pension fund by $10 million to $20 million. It is my understanding the financial data presented in MTA’s annual report does not include this debt. I have spoken with other leaders in the industry, and it was mentioned that with the new regulatory statutes and MTA’s history of decision-making in the past decade, it is not inconceivable that MTA will in the near future be operating in the red.

If this is true, does that mean MTA will not be able to honor its employee pensions? If MTA continues to lose customers and to decrease revenues, can the company in fact live up to its pension obligations? Again, why is this issue not being addressed to the membership?

When I was elected to the board of directors in June 2009, I became aware of what I perceived was a violation of MTA bylaws. I requested from the CEO and the board information to investigate this alleged violation. I requested information as an elected board member in response to member concerns about this matter and the board refused my request, saying it would require too much staff time.

Article 4, Section 7 of MTA’s bylaws state in part: “No board member shall receive compensation for serving the association in any other capacity nor shall any close relative of a board member receive compensation for serving the association.”

The alleged violation was that a seated board member (for eight years) provided contract services to MTA that amounted to millions of dollars of service coverage for MTA employees, vehicles and structures, and hundreds of thousands of dollars in fees to this director’s company. It was alleged this contract was let without the benefit of the normal bid process. I still feel the membership should demand an investigation to settle this issue. I wish to point out that current board members Larry Wiget and George Trabits were not members of the board at that time and should bear no responsibility for the above referenced allegation.

Lastly, I am concerned about the amount of compensation the board pays MTA’S CEO. The comparison study MTA uses to establish our CEO’s compensation compares our CEO with companies that I feel have very little in common with us. We do not compete nationally, and as a co-op have many different provisions that apply only to co-ops. We should only use co-ops when determining our CEO’s salary. MTA’s CEO makes more than twice what Alaska’s governor makes and more than 2.5 times what the Mat-Su Borough School District superintendent and Mat-Su Borough manager make.

In addition, MTA’s CEO last year received a bonus in excess of $100,000. I have no idea what criteria the board used in granting the CEO’s bonus, keeping in mind MTA has lost about 25 percent of MTA’s customers in the past decade, as well as profits falling by 41 percent this year as referenced in this year’s annual report.

Annual meeting

While serving on MTA’s board of directors, some of MTA’s senior management stated “that the membership who attend our annual meetings are only interested in the door prizes and getting a free meal, and will generally pass any board-recommended bylaw amendment the board recommended.”

I don’t think this is true. I mention this because with the new regulatory changes and with the present environment, it is not beyond the scope of probability that in a decade MTA will just be a shell of its former self. MTA cannot afford to lose another 25 percent of its membership.

In closing, I wish to emphasize that as MTA members we need to be aware of what’s happening at our co-op. We cannot allow any board of directors (no matter how trustworthy) to erode our ability to ask questions and demand answers. We cannot allow our board of directors to ignore the association’s bylaws. When a board of directors does not make the effort to explain the necessity of proposed bylaw changes and assumes it doesn’t have to, it’s time for us to stop the tail wagging the dog.

Chuck Foster has been a member/owner of MTA for the past 39 years and served on MTA’s board of directors from 1976-92 and June 2009 to January 2011.