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Emery Telcom’s yearly meeting was held on April 28 in Elmo. The Elmo church was filled to capacity with chairs setup in the hallways as well. Paul Crawford, board president, welcomed the members to the meeting and thanked them for coming. He also recognized Emery County Sheriff’s deputies on hand at the meeting. The Buckhorn District Order of the Arrow scouts presented the flag and led the pledge of allegiance.
Crawford referred to the ongoing investigation of Emery Telcom by the Attorney General’s office reporting the investigation is continuing and the board can’t say much. “The board has full confidence in those being investigated. Don’t rush to judgment. In America, you are innocent until proven guilty. We must see it through. The company has been held hostage by the legal process for 15 months. We have most of your support and most of you trust us.” Crawford introduced Kendall Mortensen.
“My name is Kendall Mortensen. I have lived in Emery County most of my life. I am the elected board member representing Huntington, Lawrence and surrounding area, about 20-25 percent of the cooperative. I have three years left in my third five year term. I think I was elected and re-elected because the members I represent believe in my personal integrity and ability. In 12 years I have had very few questions or concerns about the company from the members in my district. If you ask about the attorney general’s investigation my answer is ‘There is an investigation going on and we can’t talk about it.’ It is kind of like we are noisy kids in Sunday school because we are told to be quiet so much. However, we as a board have publicly stated our full confidence in those managers targeted by the investigation. I personally believe in them and suggest that you not rush to judgment. This is still America and a person is still innocent until proven guilty. A lengthy, complicated process has been started. We must see it through. We have been held hostage by the legal, investigative process for 15 months, but it will eventually be over. I believe that the vast majority of you support the board of directors in whatever decision we make because you trust us. I hope we can soon get back to normal.
“Let me share some facts with you. This company started officially in 1950. The first board of directors consisted of Merrill Day from Elmo, Rulon Nelson from Ferron, Duane Jensen from Cleveland, Dennis Killian from Orangeville, Sam Alger from Elmo, Merrill Allred from Emery, and Jess Tuttle from Castle Dale. I only mention them because most of you don’t remember the original board. The Co-op was formed to provide telephone service where no one else would. The original investment was $260,000, now the assets of the company are more that $40 million. Then we were one company, now we have seven separate incorporated companies, three regulated by the Federal Communications Commission and State of Utah Public Service Commission and four non-regulated. The company has made a profit nearly every year since 1961. Most importantly the telephone service is very good and other services, unimaginable in 1950, are among the best in the nation. I think you and I will agree that the Emery County Farmers Union Telephone Association (the original name) has grown into a very beneficial organization. I suggest that we need to be very careful before we start changing an organization that has a proven track record for 55 years.
“Dedicated employees hold things together and are well paid, based on training, experience, responsibility, and in line with national averages of companies like ours. They also have a good benefit package. It never seems to be ‘enough’ but cost of living increases are made regularly and opportunities for advancement exist. We applaud our staff that have done their best during a very difficult time
“We have been fortunate to have great general managers, not enough can be said about Keith Ware and his almost 40 years of dedicated leadership. I believe that Greg Killpack has become equally competent. In August of 2003, Tim Owens of Cronin Communications in Atlanta, Orlando and Washington D.C. told the board of directors ‘Emery is in the fortunate positions of having an outstanding general manager…the general manager may well be over-qualified to run Emery…would the board be content to pay less for a less-qualified manager?’ Greg is highly regarded by his industry peers. He is well know and admired by other telecommunication leaders around the country. He has been a director in the United States Telephone Association and is currently on the board of OPASTCO, another national association.
“Previous, as well as current boards of directors, have been and are made of people with various job experience which gives broad expertise and sound judgment. We are fortunate to have over 110 years of board experience currently. Paul Crawford is our mainstay. He was elected to the board in 1971 and was made president and chairman three months later. We have no desire to change that. He is the Director of the National Telecommunications Cooperative Association representing Utah, Colorado, Kansas and Nebraska sine 1996. We believe his work, influence and experience is a major contributor to the success of Emery Telcom.
“In short, bear with us, we are going through difficult times. We will continue to provide the services you want and adapt to the changes in telecommunications as they come along,” said Mortensen.
Crawford thanked Keith Ware, Mack Bunderson and Greg Killpack, referring to Killpack as an outstanding general manager who is highly regarded in the telecommunications field.
Crawford advised the audience to address issues and not personalities in their comments throughout the meeting.
The minutes from the meeting held in 2004 were read and approved. Erick Steinman, the chief financial officer, gave the financial report. He displayed a balance sheet on the overhead projector with the years 2000-2004 outlined. He said in April 2004, they paid down debt, which decreased cash reserves and decreased liabilities. Steinman explained the cash ratio between assets and liabilities for Emery Telcom is 4.4. A company is considered to be in good financial shape if it has a 2.5 ratio.
Killpack reported that since 1993, $841,558 has been returned to the Emery Telcom members in patronage checks. Emery Telcom awarded 11 scholarships to local high school students. They also provide $100 a month to each school for positive action rewards for students. The company has also started an intern program where a college student works in the community at a business in exchange for college tuition. Emery Telcom started the 2004 Crystal Apple award which honors local teachers for excellence. Emery Telcom supports local T-ball teams, seniors helping seniors and holds an annual blood drive.
Killpack said a future challenge facing the company is the rewriting of the Telecommunications Act of 1934/1996.
Emery Telcom is looking to pursue wireless opportunities and secure and maintain customers and stay ahead of new advances in technology. The company plans to look for opportunities to expand. In 2005, $1.6 million will be spent on capital improvement projects, some of which include: new heating system, dial up acceleration equipment, vehicle replacement; they are also waiting to hear on a deal for fiber optic placement from Grand Junction, Colo. to Provo.
The elections were held for the three board positions which were expiring, these included in Elmo, Darrell Gardner, in Cleveland, Randy Jensen and the at large position held by Kathy Justice. Those residing in the Elmo district voted for their board position and those in the Cleveland district, voted for their board position. All present could vote for the at-large position. Members went to the microphone to nominate people for the positions. In Elmo, Doyle Jensen, Tom Hansen and Darrell Gardner were nominated. Tom Hansen won this Elmo seat on the board.
Randy Jensen ran unopposed for the Cleveland position and retained his board membership.
In the at-large position two candidates were nominated, current board member, Kathy Justice and McKette Allred. In this election, Justice maintained her seat on the board.
After the business of the meeting was conducted the board opened the meeting to take a few questions from the members. One member, Gary Arrington, mentioned the large turnout of the meeting, with 537 people voting for the at-large candidate. He mentioned that Emery Telcom had taken out an ad encouraging people to attend the
meeting saying the future of the company was at stake. “What do you mean the future of the company is at stake,” said Arrington.
Crawford responded that when people don’t turn out for the ballot box, then voices aren’t heard.
Arrington wondered if the board has done their duty in spending the company’s money to hire legal counsel for the employees. Kendall Mortensen responded that the board would have been derelict in their duty if they had not spent the company’s money in defending the company.
The question of who was paying for lawyers was raised. Crawford said there is no defense, because no charges have been made.
Lon Arnold spoke and said he had submitted bylaws changes to the company and was sent a letter saying these proposed changes would jeopardize the company and he wanted to know how these changes would do that. One proposal by Arnold was for term limits for board members. Arnold said he understood that you needed signatures from 10 percent of members to call a special meeting to amend the bylaws by state law. Arnold was told that the bylaws of Emery Telcom required 25 percent of the members to request a special meeting.
Mortensen wondered if Arnold was representing the patrons of the phone company or just himself?
Arnold also requested a copy of the independent auditors report. “Why can’t we see it,” he asked.
Mortensen said the board has been elected to represent the people. They have sought counsel from professionals and their attorneys say that in a competitive market place the auditors report should not be made available to keep such information from the competition.
Crawford said the investigation is still in progress and they can say nothing until it is settled and when settled the correct information will come forward.
Karen Dellos wondered how close the investigation is to coming to an end? Crawford said their internal investigation has been completed and the ball is in the Attorney General’s court and it’s not known how long it will drag on.
Dellos said it leaves the employees in limbo.
Crawford agreed that it has been a terrible time for the company and his heart goes out to the employees and he thanked the employees for the work they have done.
Dellos wondered why one employee lives out of state and they pay his expenses to fly back and forth.
Mortensen said they couldn’t find anyone with his qualifications that would live in rural Utah. Most people with qualifications of this type are established in other areas and it is hard to entice them away from other companies and in this day and age, commuting long distances for work isn’t unusual. With communication the way it is, you can do the work and not actually have to live in the city where the company is headquartered.
Crawford said that Ajay Tipnis has made the company more money than his wages and it has been well worth it.