Annual Meeting

BYLAW CHANGES PASS AT ANNUAL MEETING

Article I, Section 5, Article VII, and Article XIII of the SLVREC Corporate Bylaws were amended by the members at the 2023 Annual Meeting on June 13.

Article I, Section 5 and Article VII were amended to help SLVREC account for the current and future success of its broadband subsidiary, Ciello, Inc.

Specifically, SLVREC is a 501(C)(12) non-profit corporation under the IRS Code. To maintain its non-profit status under the IRS code, SLVREC must ensure that 85 percent or more of its revenue comes from member- or patron-related revenue sources. Under the code, however, Ciello’s revenue counts towards SLVREC’s non-member  (non-patron) revenue cap. To prevent this from becoming an issue that could result in SLVREC losing its tax-exempt status, SLVREC chose to be proactive.

With the help of specialized legal counsel, SLVREC focused on a solution that essentially makes Ciello’s customers patrons of SLVREC. This means that revenue derived from Ciello’s customers will now be accounted for in a manner that will not endanger SLVREC’s tax exempt status. As a result, Ciello customers will now be able to receive patronage dividends in a manner similar to SLVREC’s cooperative members. This further aligns with SLVREC and Ciello’s goals and benefits the customers and members of both entities.

The proposed amendment to Article XIII aimed to help the SLVREC Board adapt to a dynamic, diverse, and complex energy industry by allowing it to amend the corporate bylaws with a 2/3 majority vote by the Board. The Membership retains its ability to check and balance the Board’s authority by making amendments to the corporate bylaws at an annual or special meeting.

This proposed amendment created a lively and welcomed debate.Some members feared the bylaw change could give the board too much power at the expense of the interests of the members. Other members felt that the Board should be able to make changes to the bylaws if needed without resorting to calling a special meeting of the membership. Ultimately, the membership chose to entrust the Board with this important responsibility.

The lively debate reaffirmed the role that democratic governance plays in the management of SLVREC. Director Creede Hargraves states, “when a director is elected to the board, we must swear to an oath to uphold the interests of the majority of the membership first and foremost, at risk of malfeasance; with regard to operation of the business of the cooperative. We must, also, swear that we will always act under the confines of our Cooperative Corporate Charter, Articles of Incorporation, and Bylaws in the best interests of the membership. We are also mandated to attend, pass, and become certified in a series of training courses on how to manage a cooperative. If the membership does not agree with how their representative director is operating, they can vote them out.”