by JEN BIUNDO

Former PEC board president Juan Garza (Photo by Jen Biundo)

In a surprise move, a divided board of the Pedernales Electric Cooperative voted in a 5-2 split to fire General Manager Juan Garza Monday, just five days before the annual members’ meeting that will replace two lame duck board members.

Garza was hired in early 2008, as an embattled PEC was facing a member-led lawsuit and mounting allegations of criminal wrongdoing by co-op officials, enabled by a complacent board of directors. He replaced former General Manager Bennie Fuelberg, who is now preparing to face trial on felony charges of money laundering, theft in excess of $200,000 and misapplication of fiduciary duty in excess of $200,000.

In voting to fire Garza, three new board members elected as reform candidates joined forces with the last two remaining old guard directors who were appointed under Fuelberg’s watch, O.C. Harmon and R.B. Felps.

Board members have been tight-lipped about their reasons for firing Garza, calling it a private personnel issue.

“Juan Garza truly is a decent person,” said PEC Board President Larry Landaker. “He has been a good steward of the co-op through a difficult transition. He worked with the board to bring about some of the financial reforms we now enjoy – those are to his credit. But there are a host of other things.”

Landaker, elected in 2009, declined to list any specific incidents that led to the termination, but said that overall he wanted to see more rapid change away from the co-op’s old ways, in keeping with recommendations from reports such as the Navigant audit that condemned the policies of the Fuelberg regime.

“I’d be the first in line to tell you we need to quicken the pace of addressing those recommendations,” Landaker said.

But speaking off the record, some co-op officials condemned the board’s action, saying it was better suited to the secrecy and surprise firings that marked the Fuelberg era, rather than the new and transparent reform board. One official called the termination “a classic coup” and said the move would shock and devastate PEC employees. Another official called the firing “preemptive, rash, emotional, not well thought out and unprofessional.”

“There has been some chatter out there that suggests that the board wants to keep things the way they used to be,” Landaker said. “I don’t have that sense at all. We’ve crossed that river now where the board agrees, old and new members, that we are an open, transparent organization.”

PEC Director Cristi Clement, elected in 2009, agreed.

“I know there’s a lot of rumors flying, but this was really a considered step and it was primarily based out of several studies that consistently keep showing there are things that need attention,” Clement said. “This is more about the way forward for PEC, and we need to always have that solid future in view.”

Garza, who will take about $1 million in severance pay, said Tuesday that he was surprised by the move, but respected the board’s decision.

“They have every right to make that decision,” Garza said. “They have the right to have someone in there that they support.”

Garza pointed to his record of making the co-op more transparent by opening up meetings and records, increasing reliability of electric service, restoring the bond rating to an A+ from an AA-, improving customer service ratings and lowering rates. He said he believed he was making changes at an appropriate pace.

“I’ve always believed that when it comes to finances, you go steady and sure,” Garza said.

District 3 Director Kathryn Scanlon and District 7 Director Patrick Cox, both of whom were elected in 2008 on a reform platform, cast the dissenting votes.

While acknowledging that there was still more work to be done to clean up the co-op, Cox said that overall he was satisfied with the job Garza had done and didn’t see cause to terminate him.

“I think in replacing Bennie Fuelberg, Juan Garza and the reform members of this board have faced tremendous challenges,” Cox said. “I think we’ve made very significant improvements for the members of PEC.”

Cox questioned the timing of the vote. The annual meeting this Saturday will replace the last of the two appointed old guard board members, resulting in the co-op’s first fully democratically elected board. Prior to 2008, the PEC board hand-picked a nominating committee who selected a single candidate to run for each seat, leaving challengers virtually no chance of winning the rigged election.

Felps, appointed in 1994, and Harmon, appointed in 1975, are not seeking reelection this year.

“Obviously it would have been preferable for the board to await the outcome of the annual meeting and the election before consideration,” Cox said.

Members who voted for the termination denied that they were racing against the clock to fire Garza before the new members were elected, possibly reversing the vote.

“There was no particular timetable that dictated this,” Landaker said. “There was no ulterior motive or anything sinister about the timing. I came to the conclusion that the change was necessary over a long period of time, and it gelled for me in the last few weeks.”

Clement also said the timing wasn’t deliberate.

“It was just a point in time and it sort of fell into place,” Clement said. “It didn’t have anything to do with any point in time other than accumulation of more information. The board was of a mind that there was sufficient information to maybe quicken the pace.”

She added, “Right after my election, I don’t know that I could have been confident to make such a decision very quickly.”

Garza made $466,000 in salary, bonus pay and benefits in 2009, compared to about $670,000 pulled by Fuelberg in 2008, according to IRS records. Fuelberg received $445,000 in deferred compensation after he was fired.

Garza’s last day at the co-op is June 30.

PEC 2010 Annual meeting
When: 2 p.m., Saturday, June 19
Where: PEC Training Center,  1506 North U.S. Highway 281, Johnson City