Commonwealth Journal

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September 13, 2012

RECC Chairman Rick Stephens, 3 board members including John Pruitt & board attorney resign

Somerset — In a move that stunned the staff of South Kentucky RECC, its Board Chairman, Richard G. “Rick” Stephens; Board Members John Pruitt, Jr., of Somerset, William Shearer, of Clinton County, and Charles Gore, of Russell County, along with Board Attorney Darrell Saunders of Corbin, all retired from their positions during a board meeting yesterday afternoon. Stephens was the only board member not in attendance.

“It was like a row of dominoes,” said RECC CEO Allen Anderson who acknowledged that the resignations were a total surprise to him and other RECC staffers.

“This is something we never expected,” Anderson said, noting that the resignations came about 5 p.m. at the end of a two-hour board meeting.

The resignations leave the three most recently elected board members—Rick Halloran, secretary-treasurer of Somerset; Lee Coffee of northern Pulaski County; and Billy Gene Hurd, of Monticello, as the only remaining board members.

Chairman Stephens, who was on the RECC board 36 years and who chaired it for the last 12, had been the target of a recent campaign to remove him from the board. The campaign was spearheaded by businessmen H.E. Corder II of Science Hill; Frankie L. Nelson and John W. Tuttle, both of Somerset; and William Singleton of Stearns. They had launched a web site called “Save SKRECC” at detailing several allegations against Stephens including sweetheart land deals and questions over possible conflicts of interest. They were also circulating a petition calling for the removal of Stephens. But that’s now moot.

“In my opinion the resignations were due to public pressure,” Tuttle told the Commonwealth Journal just prior to presstime.

Ironically, in a story in this week’s edition of The Voice, a McCreary County weekly newspaper owned by Stephens and his family, he refuted the charges against him.

“Everything in that petition dates back seven and eight years and was voted on and approved by the entire Board, as well as supported by the management....I am just one of seven individuals on the Board, and do not have the authority to act alone.

“If there were issues involved with these Board decisions, which have been examined and vetted by the public Service commission and Attorney General’s Office, they would have been called into question long before now,” Stephens said in his newspaper.

Anderson acknowledged Stephens had disagreed with him on certain business decisions, and that other board members became upset during the last board election in June when some RECC workers became “actively involved” and an incumbent was defeated. Anderson maintained that since many employees are also members, they had the right to be involved in board elections as long as it was not on company time.

In mid-August an impromptu rally was held in support of Anderson at South Kentucky RECC headquarters in Somerset, where a meeting of the board of directors was being held, after it appeared his job was in jeopardy over the election issue.

“You can’t forget that the co-op members have a right to ask questions and hold us accountable,” Anderson said. “Our employees like to feel secure and appreciated. It’s been a trying time to keep morale up when conflict set in between me and the board.”

In retrospect, that rally in support of Anderson and the subsequent petition against Stephens marked the turning point that climaxed in yesterday’s events.

Anderson told the Commonwealth Journal that he and the remaining RECC board members will seek the advice of government and community leaders during the selection process for replacement board members.

“This gives us a wonderful opportunity to move ahead in new directions for the benefit of our membership,” Anderson said. ‘I also expect us to take a close look at our bylaws.”

The retiring board members are relinquishing some exclusive perks. A seat on the SKRECC board carries not only an attractive salary for part-time work, but an array of lucrative benefits including insurance, retirement and convention junkets.

Compensation varies among board members but Stephens, who term would have expired in 2015, received $29,177 last year according to PSC records. His compensation since 1997 totals more than $350,000.

SKRECC is one of 19 co-ops regulated by Kentucky’s PSC, 16 of which distribute power generated by Winchester-based East Kentucky Power Cooperative. PSC records indicated that board members for four of those utilities are not compensated.

SKRECC serves some 50,000 member/owners (more than 66,000 meters) in the Kentucky counties of Pulaski, Russell, Wayne, Clinton, McCreary, Casey, Lincoln, Adair, Rockcastle, Cumberland and Laurel as well as Pickett and Scott counties in Tennessee.

Members accumulate capital credits (shares in profit above operating costs) yearly but the last co-op wide disbursement was in 2005.

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