The Joplin Globe, Joplin, MO

Carthage, Jasper County

Discussion

March 4, 2008

Co-op members still seeking answers

By Greg Grisolano

ggrisolano@joplinglobe.com

CARTHAGE, Mo. — It’s been more than a year since former Chief Executive Officer Jim Fanning retired from the Barton County Electric Cooperative, but his name was still on the lips of nearly every member who had questions for the co-op’s current leadership during a regional meeting Tuesday night in Carthage.

The meeting was one of three the cooperative is conducting for its 6,400 members in Barton, Jasper, Dade and Vernon counties.

While the co-op recently was awarded a reimbursement from Fanning at a binding-arbitration hearing in Springfield, many of the questions focused on conducting another forensic audit to determine whether more money could be recovered from the former CEO.

Arbitrators ruled in January that Fanning should reimburse the co-op more than $112,000, but some of the members at Tuesday night’s meeting asked if that was all for which he could be held accountable.

“If the forensic audit is done,” asked one member, “can we expect more recovery from Mr. Fanning?”

The co-op’s attorney, Rod Widger, said he’s not optimistic about the chances of further reimbursement.

“The auditors don’t get into judgment calls,” he said. “All they can tell you is was it booked correctly.”

The co-op was seeking the return of more than $183,000 after an audit last year stated that nearly $300,000 in member funds was used to pay for improvements to the home of Fanning and his wife, Cheryl.

Current CEO Bobbi Jeffries told members that the co-op expects to be paid in full on Thursday.

The co-op’s board of directors initially signed off on a work order for improvements to the home, including a Smart Home technology system, valued at more than $113,000. Several other purchases, including appliances, entertainment equipment, and plumbing and bathroom fixtures, were invoiced to the co-op by the Fannings.

Board president Douglas Haile said events like Tuesday night’s meeting are evidence that the co-op is moving in a new direction.

“We desire to be open to you as members,” he said. “We realize you own the co-op, and we work for you.”

Jeffries said after the meeting that the co-op has received one offer to conduct a forensic audit of numerous departments and aspects of the operation during Fanning’s tenure as chief executive. The firm proposing the offer, BKD Inc. of Springfield, conducted the audit that Jeffries requested after Fanning resigned in January 2007.

“Membership has guided us to do that,” she said, referring to a vote taken at the co-op’s annual meeting last September to pursue a more detailed audit. “And we want to fulfill membership’s request. It’s going to be very costly to the organization.”

She said the bid ranges from $40,000 to $100,000. “I think we’re going to find more mismanagement, and mismanagement is not criminal,” she said.

The previous audit showed that from 2000 through Jan. 31, 2007, Fanning earned nearly $2.8 million, including bonuses, pension and a severance package. As part of the pension agreement, Fanning’s pension is tax-free because the board agreed to pay roughly $324,000 in income taxes related to the pension.

For now, Jeffries said, the co-op will continue to move forward with a second audit, with a decision expected within the next 60 days about which firm and what type of audit to pursue.

“Unless a special meeting were called and members voted (not to pursue the matter), we’re going to continue,” she said.

Jeffries, who took over as head of the co-op’s operations in February 2007, said that during Fanning’s tenure, the co-op lost close to $6 million on its non-electric business, including a propane subsidiary, and an electronics and wireless Internet service.

She also reported that the co-op lost more than $618,000 on the sale of the propane subsidiary. “We are completely out of the propane business,” she said.

She also said the co-op is expected to receive a 23.5 percent rate increase, but that the increase will not be passed on to residential customers this year.





500 expected



Barton County Electric Cooperative CEO Bobbi Jeffries said between 400 and 500 co-op members have registered to attend the co-op’s final regional meeting at 6 p.m. Thursday at Thiebaud Auditorium in Lamar.

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Carthage, Jasper County
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