Kit Carson v. PRC and members: HCH and ToT v. Taxpayers

By: Bill Whaley
12 February, 2016

Unfit to Print

On 11 February 2016, the Kit Carson Electrical Cooperative (Coop), through its attorneys, Cuddy and McCarthy, filed a motion for a rehearing at the Public Regulation Commission (PRC). As Taos Friction has noted, Coop Trustee and blogger Peter Adang revealed that the Coop had experienced a $1.4 million dollar swing toward the negative side of the ledger in 2015: the coop earned a $600,000 profit in 2014 but lost $800,000 in 2015. Now the Coop screams for “due process” and wants to “cover up” its peccadilloes.


The Coop presented the PRC with a desperate request for a rate increase in January but the request was suspended, since more than the 25 affected members, per the regs, protested. In addition to the rate request for an increase of 19%, a charge aimed at the bottom tier of users, both conservationists and low-income earners, the Traveling Trustees booked reservations and allegedly visited New Orleans on one of their annual jaunts to celebrate a “very good year” ? According to the Coop’s figures the Trustees spent $3 million on fun and frolic from 2005 to 2013.


The request for a rehearing reflects what can only be seen as a “desperate” ploy on the part of the Coop to avoid public scrutiny. The Taos News published estimates of debt for the Coop at around $80 million. But the debt is still climbing, what with Capital Credits owned ($60 million plus), proposed Tri-state buyout ($38 million) and Broadband Loan ($20 million) more or less. Course the Coop isn’t talking except for Adang.


Members do know that Coop “divisions” or “side ventures” into Call and Command Centers, Propane, Internet, and Broadband have lost money during the last decade and continue to drain revenue from the electric-side income base. The Coop’s main banker at USDA/RUS, represented by Terry Brunner has said the federal government won’t be loaning the “debt-driven” enterprise any more money. He also said that despite the Coop’s award of $65 million in grant and loans for Broadband that the Coop is probably the worst performing grantee among the recipients of the Obama administration’s “American Recovery and Reinvestment Act.” The Coop’s own submission for a rate request to the PRC, according to a “cost of service study,” confesses that this KCEC is among the worst performing Coops in the state.


One wonders if the Trustees even read their own submission? We can’t confirm all the figures above because the Coop refuses to release financial information, despite Supreme Court Decisions mandating access.


Coop CEO Luis Reyes confirmed in The Taos News that money generated by the electric-side revenues had been used to fund start-up costs for the Broadband program. Though critics suspect current and scheduled debt are much higher, the Coop’s generally accepted total of some $80 million in debt v. $134 million in equity, speaks to the shaky condition of the Coop.


Despite the obvious conclusions that the Coop needs an “audit and should address the charges of “mismanagement,” by  providing members with a business plan, the Coop’s filing for a rehearing is based on procedural issues, not issues of substance. The PRC’s counsel (now retired) said 33 protesters met the regulatory threshold necessary for a hearing. The permanent PRC staff claimed more than 60 met the same threshold.

While the Coop pleads ignorance as to who is who among protesters, it has been pressuring members to drop protests, claiming “politics” is the motivation and otherwise intimidating members by sending out employees and trustees in a round-robin retaliation against the vulnerable. Reyes is spending hundreds of thousands of dollars on the sharks at Cuddy and McCarthy to stop the hearing from inquiring into the Coop’s financial condition. The protesters appear to be a group of pro se cockroaches, according to Trustee Adang. But as one protester said, “Adang was supposed to be the great white hope but he turned out to be the great white dope.”


Indeed, the Coop argues that neither issues of “mismanagement” nor a forensic “audit” is allowed by the regulations. (They are taking the same line that Tri-State used against them in the past when the Coop’s shoe was on the other foot at the PRC). According to the Coop, the business of the Coop is of no concern to members who own the Coop. Still, the greater crisis at the Coop concerns the slide down a slippery slope of increasing debt, declining revenue, and mismanagement of the so-called “divisions.”


And the Board of Trustees is more intent on filling their pockets and traveling than on fiduciary oversight. Rather than negotiate in transparent fashion with its members, the Trustees hide behind the skirts of their attorneys. Meanwhile the Energizer Bunny runs away from the coyotes of debt and insolvency.


In terms of style and a lack of oversight there’s a direct connection between the Trustees and the Board of Taos Health Systems, which oversees Holy Cross Hospital and its out-of-town management team. HCH management has been skimming the cream off the top of a failing institution for more than a decade. Now THS wants taxpayers to bail out the management and use public taxes for a building due to a policy of deferred maintenance and repairs. All the do-gooders and scared folks are on the side of the hospital.


Taosenos: as you lose your Ag exemption and Taos County Property taxes surge, more locals will be forced to sell. Both the Coop and the Hospital are forcing you out.  The surge in the County’s electric rates could cost taxpayers as much as $50,000 annually.  Ask Commissioners Blankenhorn, Fambro, and Mark Gallegos why they didn’t submit an “RFP” statewide for a new hospital administration to oversee the hospital. Eh? What gives?

The hospital’s primary campaign face for the tax increase is an employee, “Mother Teresa” Trujillo, Coop Trustee Manuel Medina’s partner. Don’t you know she and Manuel love New Orleans even as the members pay into the trust fund for family vacations?


Meanwhile the Town of Taos, who also supports the hospital tax and more directly the Coop’s bottom line with its “Christmas Tree Light” extravaganza. Like the Coop’s Luis Reyes, Mayor Barrone has been stonewalling critics of the town’s historic (and current?) in-house violators of the procurement code. Even though this administration “inherited” the procurement code violators, costing taxpayers millions in cost-overruns during the last decade, Bellis and Barrone have paid off one whistleblower to keep the “cover-up” artists at Town Hall safe from public censure.


But there’s a second whistle-blower case moving ever so slowly through the courts. And yes, Taos Friction has more information being prepared about procurement code violations regarding the quartet who sing for their supper in tune with the Cowboy’s quirt at Town Hall. More than one Town department is involved in this “politically sordid and unsavory cover-up.”


The Friction waited almost two years before dropping the shoe of Antonio Martin. But Barrone, Bellis, and Hahn knew the score when they were elected. But instead of “cleaning up,” they chose to “cover up” and have exposed themselves and the employees to this school for  scandal. Bellis, Barrone’s eminence grise, even tried to deceive the P&Zers re:  the Smith’s matanza. But Barrone, the big fella, burped.


The Mayor has told me that I have no “understanding” of the way things are. He’s right I misunderstood his motives for running and his intentions when governing. But the procurement code pattern, preserved by indelible ink, looks like a tattoo on the Mayor’s forehead. It ain’t ash Wednesday anymore and it ain’t going away.

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