THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, October 25, 1995 TAG: 9510250494
SECTION: LOCAL PAGE: B1 EDITION: NORTH CAROLINA
SOURCE: BY LANE DEGREGORY, STAFF WRITER
DATELINE: BUXTON LENGTH: Medium: 76 lines
A turbulent year at the Cape Hatteras Electric Membership Cooperative drew a record number of members to the power company's annual meeting Monday night.
But the 155 Hatteras Island residents who gathered in the Cape Hatteras School auditorium seemed more interested in the free door prizes and bakery-bought cake than they did in their co-op's finances or future.
After a two-hour meeting, not one person asked a single question of the co-op's manager or board members. No one even made a comment. And the only challenger for the three vacant board seats dropped out of the race at the last minute without explanation.
Eight of the nine board members retired to their office after the membership meeting to quietly elect their own officers.
Board President Jack Gray refused to run for re-election, although he stayed on the board. By secret ballot, board members nominated and elected Vice President Dale Burrus as their new leader. Walton Fulcher was chosen vice president. And John Robert Hooper, who was re-elected to a three-year seat, also was re-elected as the board's secretary/treasurer.
Elvin L. Hooper also was re-elected to his seat. And Richard A. Midgett was chosen by the membership to replace Herbert Oden, who retired.
``I'd like to trade places with Walton, personally. But I'll try to do the best I can,'' Burrus said after the evening election. ``I said I'd take a turn at leading this group. But I didn't think it would be this early - now. I will, though, if that's what you all want.''
A nonprofit cooperative owned by its 3,800 Outer Banks members, Cape Hatteras Electric Membership Co-op employs about 20 full-time people and serves all Hatteras Island homes and businesses.
One year ago, Cape Hatteras Electric Manager John Echols resigned after less than four months on the job. He said the board and its president were interfering too much in the co-op's daily operations. And he charged the nonprofit power company with over-paying its Danville accounting firm, Johnson and Dooley.
Echols released statements showing that the co-op had paid the accountants $434,000 between October 1993 and October 1994. The board of directors initially defended its accountants. Then, in January, the directors released an outside audit showing that Johnson and Dooley had overbilled the power company by more than $100,000 in a single year.
Cape Hatteras Electric's leaders fired the accountants - then filed a $700,000 lawsuit in federal court, claiming that Johnson and Dooley had overbilled them. Johnson and Dooley fought back by filing a $16 million countersuit that said the co-op had unlawfully terminated its contract and tried to defame the accountants. In July, the two parties settled out of court.
Johnson and Dooley waived $123,000 in unpaid invoices, agreed to provide the power company with $20,000 worth of future accounting services and said their insurance carrier would give the co-op $15,000.
The electric corporation's board hired an interim manager, James Sherfey, to help straighten out the operation.
In May, Cape Hatteras Electric completed a new 115-kv upgrade project to provide improved power for the entire island.
This month, co-op officials began mailing rebate checks to their members - saying that they had such a financially successful year that they could afford to share some of the profits.
``We think it's one way to show evidence that we are a cooperative - and you can receive some of the benefits and profits of that successful system,'' Sherfey told the members Monday night. ``We have some hurdles yet to cross. But I will not leave until a new manager is in place.''
Co-op directors mailed a total of $256,974 to its members in profit-sharing checks. The average rebate was $67.23. Pay out amounts ranged from $1 to $10,401 - which went to the U.S. Coast Guard.
According to Cape Hatteras Electric's annual report, the co-op brought in $7.89 million in 1994 and paid out $6.86 million, leaving a final profit margin of about $1 million. by CNB