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What's a co-op director worth?

"What's up, Doc?" was the greeting of a fellow co-op member who knew I was a director, as we met in a supermarket recently.

"Well, I just came back from the annual REA legislative conference in Washington," was my reply.

"Washington, eh? Hear that's a mighty expensive place. No wonder my light bills are so high," he said, pushing his cart down the aisle.

He didn't want to hear the trip was to try and persuade Congress to continue REA funding so his bills won't go even higher.

Actually, some of us who went from Michigan arose at 3:30 in the morning so we could be in the Capitol by noon for a long afternoon briefing session by NRECA. And then we tramped the halls of Congress for two days begging senators and representatives alike to continue funding REA's lending program, one President Bush would have liked to to eliminate. All of this at the busiest time of the year for most of us. But 2,500 dedicated managers and directors from 46 states went, and will be back again next year retelling the story of REA. It's just part of a director's job.

Who are these directors anyway? Paraphrased, most bylaws say, "A director is an elected member in good standing who maintains a voting residence--where he votes in state and federal elections--in the area served by the cooperative."

What does a director do? Again, generic bylaws: "The business and affairs of the cooperative shall be managed by nine (or another number) directors who shall exercise all |my emphasis~ the powers of the cooperative except those conferred on the members."

And what does a director agree to do? Some co-op bylaws state "he must be willing to attend all scheduled and special co-op meetings, attend national, state, and local meetings associated with the cooperative movement, together with director training seminars which will aid in keeping the directors informed on cooperative matters."

Those words meant some of us were away from home more than 20 days last year.

Running an electric co-op is big business, and the board sets the direction the co-op takes, for better or worse. They are ultimately responsible for maintaining line voltage to the members over hundreds of miles of line, voltage of such high quality as to properly operate increasingly sophisticated electronic equipment. The board must decide such things as when to expand service, borrow the money for it (often in the millions), approve work plans for the project and okay repayment schedules. They must approve negotiated union contracts, load management policies, audit reports, annual financial statements and forecasts as well as safety reports and okay every check written by the co-op every month, sometimes hundreds.

In addition they are responsible for hiring the manager who trains a very diverse work force of many people. The manager must oversee the purchase of power and its transmissions from substation to the member, be active in pursuing economic development opportunities, and be available for hearings before the Public Service Commission and the legislature. These are a few of the responsibilities a board member assumes in helping run a multi-million-dollar business with an income in the millions. And all this with the ever-present threat of a liability suit against the director should he act in a less-than-prudent manner.

But back to our friend in the supermarket. How much does it really cost a member to have "nine of their own" assume all the responsibilities of running a co-op? And that figure must include all the meetings and their attendant expenses plus having seminars and such legislative trips as mentioned earlier.

Give up?

Less than 18 cents per member per month. Friends, there is a real bargain if I ever saw one!

Harold (Doc) McCaughrin is a retired orthodontist and a member of Top 'O Michigan Rural Electric Cooperative located in Boyne City, Michigan, and a member of its board of directors for the past six years. He began his "second career" at age 76 and will be seeking another term shortly. Doc has also represented his cooperative on the board of Wolverine Power Supply, a G&T serving seven distribution systems in Western Michigan, for five years. He received his NRECA director certificate in 1992, becoming only the second director in the cooperative's history to receive such recognition. This is one of several articles Doc has authored concerning the rural electric industry.
COPYRIGHT 1993 National Rural Electric Cooperative Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:rural electric cooperative
Author:McCaughrin, Harold W.
Publication:Management Quarterly
Date:Jun 22, 1993
Previous Article:Evaluating the REA buy down opportunity.
Next Article:Director fees and expenses - developing a board performance plan to prepare your system to respond to member and public inquiries.

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