Voters OK hike in HEA debt limit

Posted: Sunday, December 12, 2004

Homer Electric Association members cast their votes during a special election at the Kenai Visitors and Cultural Center on Friday, and Propositions No. 1, 2 and 3 all passed by wide margins.

"I'm extremely pleased with the decision by our members. It was critical to our future development and economic well-being," said HEA Board President Dave Carey.

Proposition No. 1, which was unanimously endorsed by the HEA board of directors, involved amending Article VI of the Articles of Incorporation in order to raise the co-op's debt limit from $150 million to $450 million.

In 1945, when the cooperative was just being formed, the debt cap had a limit of $5 million; nine years later, it was raised to $40 million; in 1977, it was raised to $150 million.

That $150 million debt limit had remained the same for the past 27 years. However, during that time, the number of electric meters in HEA's system has increased more than 75 percent.

To change the articles required approval from two-thirds of the co-op's voting members, and that quorum was met for Friday's vote.

Jim Stogsdill, chair of the election committee, reported 4,447 HEA members cast a vote during the special election.

Of those 4,447 votes, 4,437 were mailed in, while 10 votes were cast in person, and 4,389 votes were counted while 58 votes were voided due to ballot signature anomalies.

Proposition No. 1 passed with 3,346 "yes" votes (78 percent in favor of the amendment), while there were 929 "no" votes (22 percent).

"That's an almost four-to-one margin, so it wasn't even close, which was a good thing," Carey said.

He attributed the landslide victory to teamwork.

"It shows the work of the HEA staff paid off. The educational campaign, the presentations, the mail-outs, the word of mouth — it all paid off overwhelmingly," he said.

The $450 million increase will give HEA "financial flexibility" to cover electricity generation, transmission, distribution, operation needs and normal anticipated plant growth over the next 10 to 25 years, according to HEA General Manager Brad Janorschke.

"If we need to build our own generating station within 10 years, we would be able to," he said.

Currently, HEA purchases electricity that is generated by Chugach Electric Association, but Janorschke said that contract expires in 2013.

Proposition No. 2, a bylaw change that called for electing board members by district rather than at large, passed by a six-to-one margin.

It received 3,691 votes in favor (86.5 percent), and 579 against (13.5 percent).

"In a sense, members said they want to vote for people they know and that know them," Carey said.

Proposition No. 3, a bylaw change calling for establishing term limits of three, three-year terms for directors' service, passed with 3,341 "yes" votes (77.6 percent), to 963 "no" votes (22.4 percent).

Prior to this change, board members had been able to serve for as many years as they were re-elected, but co-op members requested the change to term limits to give more people a chance to get involved.

"The members have clearly said that term limits are healthy for us," Carey said.

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