GVEC Pridgeon, Marcus - April 22, 1987
Interview with Marcus Pridgeon
Interviewer: Karen Yancy
Transcriber: Karen Yancy
Date of Interview: April 22, 1987
Location: Mr. Pridgeon’s Office, Guadalupe Valley Electric Cooperative, Gonzales, TX
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Begin Tape 1, Side 1
Karen Yancy: This is Karen Yancy. Today is April 22, 1987, and I’m conducting an oral interview with Mr. Marcus Pridgeon, manager of the administrative division of Guadalupe Valley Electric Cooperative [GVEC].
What year did you begin working for GVEC and in what position?
Marcus Pridgeon: I began on April 1, 1981, as a management assistant.
Yancy: Okay. What promotions have you received, and how did your responsibilities change as a result of this?
Pridgeon: On July 1, 1986, GVEC opened a new division, the administrative division, and I was appointed division manager.
Yancy: What experience did you bring to GVEC?
Pridgeon: When I graduated from Stephen F. Austin State University in 1977, I went to work for the City of Gonzales and officially became the director of finance with a degree in accounting—basically a pencil pusher, a lot of hand work. That’s sometimes a very good base, a very good feel for numbers, and basically that’s what I brought to the Cooperative: a better feel for numbers.
Yancy: Okay. What are your responsibilities as manager of the administrative division?
Pridgeon: We cover a lot of diverse areas. We are responsible for all personnel activities, and I am responsible for grounds and building maintenance. We are also responsible for major financial states, such as the operating budget or the financial profile, cost of service studies, studies of the nature, and I am responsible with what I think of as long-term money. I am responsible for being sure that we not only have money in the bank for tomorrow or the next day or the next week of the next month, but I am responsible for seeing that we have money in the bank in 1989 or 1990 or 1991—the very large dollar amounts, which comes primarily through our rates. I am responsible for all the matters which GVEC conducts through the Public Utilities Commission.
Yancy: Okay. What divisions are under your direction, and what are their responsibilities?
Pridgeon: In the area of personnel, we have the benefits administrator. She is primarily responsible for the Cooperative’s retirement plan. Working with her, we have an administrative assistant, who is responsible for the Cooperative’s major medical insurance. We offer plans to all our employees, and in those two positions, they also handle all the small employee benefit packages, business travel, things of that sort. We have another administrative assistant that assists me in major financial studies, and she primarily is a number puncher. She takes the billions and billions of numbers and gets them down into something we can understand. It’s kind of amazing. There’s only nine numbers in the whole world; we put them together in different ways, and they get more complicated. So she is a number cruncher. We also have Susan Debose up front. Susan is the secretary for the division, and she backs up in filing medical claims, doing just about everything that needs to be done. In the area of building maintenance, we have two janitors who work inside and the yard maintenance man.
Yancy: Okay. How has each division changed since the administrative division was created? Have they changed?
Pridgeon: Absolutely. I suppose when the administrative division was formed, it took a lot of diverse activities, activities that weren’t actively related to other divisions, and brought them together. And as you can see in the administrative division, I’m responsible for everything from major financial studies to being sure that the commodes are clean. Building maintenance used to be under the business administration—the business division, excuse me—of course, this is not a business-related activity, so it became part of administration. So, the administrative division was created and took activities from other divisions and lumped them together.
Yancy: Has the energy situation, the high cost of fuel, changed the services your division offers? In relations to customers, members?
Pridgeon: I suppose the way we affect the customers the most is in an indirect way. My division affects the customer’s utility bill. In forms of one-on-one relationships with customers, we primarily deal with inside. Let me kind of explain. We are responsible for all matters dealing with the customer’s bill, which primarily are rate provisions. So, the answer to your question, I think, is talking about the high prices of fuel in the last two years. They have been cheap, extremely cheap—
Pause while Mr. Pridgeon answers the telephone
Pridgeon: So I suppose the price of energy over the last six years has affected the way my division relates to our customers, through the way we calculate the rates, and in our dealings with the Co-op’s membership.
Yancy: Okay. What would you describe as your most important accomplishments? What changes have you implemented, and how successful have they been?
Pridgeon: One thing that I take a lot of pride in is our operating budget, and I’ve dealt with budgets for years and years and years with different organizations. And primarily the budget time is kind of like being a Catholic in the Lenten season, and you have forty days in Lent, and you get together, and you really reconcile what’s gone on the last year, and then you forget about it until next Lent. And that is typically how a budget is worked: a few of us get together before to do budget preparation, they thrash it, they talk about it, they prepare the budget, they present it to the board, the board approves it, and they shove that budget in a drawer, and they don’t think about it until next year. Well, we’ve got a little different philosophy because I’m a believer in that the document has no meaning unless it’s used. And so, over the last six years, we’ve evolved into a very sophisticated budgeting procedure, and I am not one to get tied up with paper and red tape, people filling out reports. I would much rather see people producing than I would seeing them write about what they producing. But we implemented a system that I believe will be really an outstanding system and I take a lot of pride, today, that our division heads and our department heads have a very astute understanding of how the dollars flow through, flow right out of our member’s pocket—
Yancy: Mm-hmm.
Pridgeon: —and flow right through our organization.
Yancy: What exactly is the budget system that you came up with?
Pridgeon: Well, it’s a system that when I came here, the budget primarily consisted of two or three legal pages and it was done in major categories. I’m talking about a category that would be transmission expenses.
Yancy: Okay.
Pridgeon: Who knows, transmission expenses might be hundreds of dollars, and it was, you know. If it was $100,000 this year, they would budget $105,000 for it. Well, as the budget process progressed, we took it down to an accountant level. So, under transmission expenses, we could tell how much was labor, how much was materials, how much was each certain thing. So, we understood what was feeding into these accounts, and as it continued to progress, we now got to the point where we can tell which division is feeding into which account. We have a payroll count under transmission, how many dollars has my company put, how many dollars is electric systems, how many dollars is engineering, how many dollars is business. Where are the dollars flowing through to come there, and I think it really is a realization that we didn’t know where all of the dollars were flowing from, and I think that’s one thing that we have got to remember, being a rural electric cooperative, is that every dollar that comes through here comes right out of the pocket of the people who own us, and I think that we’ve brought that home to folks.
Yancy: In your opinion, what makes GVEC distinctive?
Pridgeon: I’ll have to answer that several different ways. I guess one thing that impressed me about GVEC is the membership. GVEC has a service area of approximately one hundred miles wide. It runs all the way to a small community named Azle, south of Hallettsville, [and] to the west, the City of San Antonio. And the makeup and the heritage of the people in the service area is just tremendously diverse. In the eastern portion of the service area, in Lavaca County, you’ve got the German Bohemian heritage, an older group of folks who are primarily dirt farms and grew up and can remember when the Rural Electric Administration [REA] come out there and put poles in the ground and brought electricity to their house[s]. Whereas in the western portion of our system, you’ve got a very young, affluent, upper class of folks who really don’t have a real astute concept of what that cooperative philosophy is all about: one member, one vote. But, I truly like being with people who understand the public philosophy, and we do our very best to educate the young to our philosophy. We feel very strongly, extremely strongly, about our communications and our relationship with our membership; that’s everything. As I’ve said before, every dollar that we make comes out of their pockets. Every day I walk through that door, I know who’s paying my salary. That’s the bottom line, I think. The reason for our very strong emphasis on our membership comes right from the top, comes right from Bill Hines. Mr. Hines has been with the Cooperative, oh, gosh, twenty-plus years. He’s been General Manager since 1970. He became the general manager from our member services division. Member services is primarily concerned with our relationship with the membership, and Mr. Hines brought that to the top with him, and so he stressed that, and he built an organization that permeates that concept, and so I think—and you asked me how do I think we distinguish ourselves from all the other cooperatives, I think that’s our truly sincere desire to serve the members; they’re paying our salaries.
I think another way we distinguish ourselves is the aggressive attitude of the management. I think Mr. Hines has instilled in us to be “doers” and not—and don’t take this wrong, not academics. (Pridgeon and Yancy laugh) Although we fully understand the importance to be placed in understanding a situation, the feasibility study on it, but sooner or later the rubber’s got to hit to road, sooner or later the project’s got to get done, and I think one of the things we see wrong, not only in some of our sister cooperatives but just in a lot of management and in society in general, is the fact that we want everything perfect before we make a decision. We want to know absolutely 100 percent of all the facts. We don’t want there to be any risk, and we want everything to come down to the bottom, and we just got to choose one of those numbers. Well, we’ve got to understand that life is not perfect, it doesn’t work that way. What we’ve got to do is you have this thought, you go in, and you study the thought, and then you make a decision and go about your business. Let’s say that we have made some decisions that could have been made better, but at the time we felt in our heart very sincerely that was the best yet for the GVEC membership. One thing that I already remember, a little article that was placed in the newspaper, the first, because I see all of that rhythm changing for us, it stuck in my mind, “he who made makes no mistakes, is doing nothing.” I think that’s probably true. We make mistakes, but we get things done. I think that’s what—as I recall, and it’s probably not an exact quote, but President Roosevelt said, back in the start of the Public Works Programs, “By God, he didn’t know if what he was doing was right, but he was going to do something.”
Yancy: Have there been any innovations in our division since you became manager; if so what were they? Besides the budget.
Pridgeon: Innovations, I like that word. We’re encouraged to do it, and I think we are. I think what some of the phrases that make us smile the most around here is, “ground’s never been plowed before,” or “nobody’s ever traveled this road before.” We are the leaders in doing things ourselves. We take the money out of the pockets of the local people, and personally, I think I can speak for most of the people here; I’ve got trouble with shipping those dollars to New York City, San Antonio, or Austin, when half of the things done are those that we can employ local folks to do right here. A lot of utility services, we have meters that are broken, transformers, transfers, we send them off to Austin to shop and get—of course, you have to look at the economy side, and the small utilities which wouldn’t be able to all have their own ships, but utilities the size of GVEC, we employ the local folks, we train them, and that has just been our philosophy, working with, employing local people. Let’s keep that down, let’s keep those dollars in our community. As far as innovations in my division, we prepare, every year, a cost of service study. Cost of service study basically divides the cost and the revenues for GVEC by different rate classes. What that means is that we do not subsidize; our residentials don’t subsidize our commercials, our industrialist or vice versa, and, in the past, we have always had agencies out of Oklahoma City to do this study for us, and they’re a very fine group of folks to deal with. Since we’ve formed the division, we’ve done different kinds of forms of service and [are] doing a very good job of it. I feel now that I personally have a much better feel for the numbers that fall out of that document than I did when I was getting a real high velocity version from Oklahoma City, when I sat down and read it. I feel very, very good about that, and, to my knowledge, we are the only cooperative in Texas doing their own cost of service studies. Let me mention our philosophy: we’re intelligent farm boys, and my group can get a project done.
Yancy: What do you see at the future of your division and of GVEC?
Pridgeon: The future of my division—as you may be aware, December thirtieth, GVEC bought out their REA loans, and there were a tremendous amount of decisions, and many, many hours have gone into just crunching the numbers and figures to see how many dollars. I guess one of the major decisions made by the management and the board—I say decisions, they were more than decisions, they were commitments—was that we were going to have to start acting like a business. We’ve been with REA forty-seven years. For forty-seven years, REA was a tremendously big part of trying to keep us going, but like a lot of younger programs, what they tended to do is to prostitute the people who borrow from them. You fall into a false sense of security because big brother is always there standing over you.
Yancy: Okay.
Pridgeon: But actually the way the plans for ratio revenue worked out with REA, which is the method by which they determine your loan ratio and your supplementary risk, a quarter of, not the organization you were, but the quarter you were managed the more government help you got. So it worked exactly opposite of what we believed the American philosophy was. I’m starting to sound like a Republican, and God knows that’s the bad word around here; I would never admit to being a Republican. But I think that more poor the utilities; you know, I can even go further than that, I can even go to American—to survive, we’re going to have to start adhering to some more basic business principles, but what we’ve got to understand is America is a little over two hundred years old, and it’s an experiment. Democracy is a great big experiment, and occasionally we got to stop and figure out how it’s going. Over the last ten or twelve years, it hasn’t been going too good, and in my opinion, little things that have been happening to the economy. You know, I’m sure the way Karen Yancy operates is that Karen Yancy gets a check from Southwest Texas State University, and she doesn’t spend much more money than she gets in that check, or she can only do it so long and then she’s got to pay the bill, and that is the same way that Marcus Pridgeon operates and that GVEC operates, and every business in the world—
Yancy: Mm-hmm.
Pridgeon: Well, we’ve got a government in Washington, D.C. that continues to spend millions over what they’re making, and my question is how much longer can it last? Someday something has got to happen. I mean, just, well, like common farm boy sense tells me that something going to break someday. Somebody’s going to call our hand, and they’ll want their money back. And so I think this government philosophy has kind of filtered down through the government programs, and I believe we’ve got to get ourselves back on the track with good, sound, basic business principles. That’s one of the commitments that we made when we bought out of REA, is that, “All right, Big Brother is not there, we don’t have somebody that’s going to stand up there and pat us on the back and tell us that we’re doing a great job, you know, supply us money at 5 percent whenever we want it.” Let’s see, leads back to your question, “What do you see at the future of your division?” I think one of my major contributions, as far as the management of the Cooperative, is supplying information.
Pause while Mr. Pridgeon answers the telephone
I believe that in order to set policy, which the job for our board of directors, and to manage the organization, which is the charge of the department staff, that good, relevant, sufficient information needs to be available, whether it needs to be financial information in dollars and cents or statistical information in kilowatt hours or demand or number of consumers, average consumption; whatever the information needs to be, it needs to be in the hands of people who are making decisions. Now, I used the adjectives with information, sufficient and relevant. In the world of computers now, I’m sure that you noticed that we are computer-intensive. We could turn out volumes of paper. I mean I could fill up this room with information, but it’s difficult because we’ve got people—everybody has got a niche in life, and our board of directors are made up of school teachers, oil men, and bankers, poultry producers, and cattlemen; people who’ve been in the oil field supply business, and they’re good people, but they deal with us in a limited basis. I deal with this information eight hours a day, five days a week, and it’s difficult for me to sit there, so certainly it’s difficult for them to sit through it, meeting with us the few times they do during the month. I think one of the very important things I do is take this reams and reams and reams of information and bring it down into a document that a good, common sense person can understand, and that’s not an easy thing to do. And there’s a line there as to, do you want to fill them up with paper or what you want to give them, and I guess that’s a very important decision to make as to how much of this should filter down, how much the people need; and the fact that I give them information in an unbiased way.
Yancy: Earlier you referred to the Public Utility Commission; could you tell me what impact it’s made since its incorporation and its relationship with GVEC?
Pridgeon: Well, the Public Utilities Commission came into being in 1974, I suppose, and GVEC was a supporter of the legislation primarily because the Texas Service Area, the Public Utilities Commission, has certified certain areas of the state to service them, and basically what that did here [is that] it kept utilities from cutting each other’s throats on competition because any time you’ve got dual-certified areas, which means two utilities service the same area, in competition, the service for that utility has got to be higher because you could have accounts for half the town or some who had never heard of it, or you could have accounts switching back and forth. And so they cut a lot of that mess out, but in order to regulate the price, they had to bring all of these rate structures under regulation. Now, the Public Utilities Commission does not regulate the City of Gonzales; the City of New Braunfels, the City of San Antonio, [and] the City of Austin do not fall under the regulatory authority of the commission. Investor-owned utilities, such as Houston Limited Power, Houston Power and Light and in West Texas, generally do, and cooperatives do. So, every time GVEC wants to change its rates or service charges and things of that sort, we have to seek permission of the Public Utilities Commission, and the concept is not bad. It’s not a bad concept; I do not disagree with it. The mechanism, which is coming out of the Public Utilities Commission, is what I disagree with. Historically, the Public Utilities Commission, what happens is you take a lot of academics right out of college, and they’re good kids, but they have absolutely no experience in the utility business. They’re kids with engineering degrees, accounting degrees; I’ll guarantee you that when I came out of college with a degree in accounting, about as much as I knew about electricity as I did the light switch on the wall turning it on and off, and that’s about all I wanted to know. We’ve thrown these kids, and they are children, into an extremely complex situation, and in their position in the Public Utilities Commission, they have a tremendous amount of authority. The staff’s recommendations carry a whole lot of weight with the commissioners. Now, what happens is the utility commission, for reasons I don’t know, whether it’s just not a very friendly place to work or its pressure of the job, the tenure there is just absolutely horrible, and I’m talking about just several years. So every time we go back to the commission, we’re constantly in the room educating the folks on what we’re doing, and it just happens that way because the concept of rate regulation is not something I disagree with. I disagree with the mechanism that comes out.
End of interview