ELECTRI International Restructuring Plan for 2009

ELECTRI International – The Foundation for Electrical Construction, Inc., learned in February that the U.S. Securities and Exchange Commission had seized the assets of Stanford Financial Group, a Houston-based financial services company that was managing the majority of the Foundation's investments. Since the seizure, the SEC has appointed a receiver to oversee and protect these assets while the investigation is proceeding.

ELECTRI International has been severely affected by these actions. Since the full extent of Stanford’s financial situation will not be known for some time, the Foundation’s Board of Trustees has taken some immediate action to ensure the organization’s continued operation and future viability.

It now appears that the Foundation’s useable endowment (the amount from which earnings can be used for programs) is valued at approximately $6.5 million. This amount represents a potential loss of a significant share of the Foundation’s original endowment and requires serious adjustments to the Foundation’s projected revenue for 2009. In light of these factors, the Foundation’s Board of Trustees determined that the organization must fundamentally restructure its programs and operations. 

The Board has approved a restructuring and recovery plan that will allow the Foundation to fund research programs already underway and move forward on the majority of research proposals approved for 2009. Cost reductions and deferrals have significantly reduced the 2009 budget, and the Foundation staff will be reduced to two full-time employees. Russ Alessi will devote a majority of his time to resource development (fundraising), and Laura Capuco will be responsible for project management, programs, and meetings. Both will focus exclusively on Foundation programs and operations.

The NECA programs previously managed by Foundation staff will be reassigned to NECA staff. Mike Thompson, ELECTRI International Secretary-Treasurer and NECA CFO, will provide financial management. Dan Walter, NECA Vice President and COO, will provide oversight of the Management Education Institute.  John Grau will serve as acting President of the Foundation to assure that NECA resources can be made available as needed.

The Foundation is anticipating additional expenses due to the attorneys needed in the asset recovery effort. Until the Foundation’s financial situation stabilizes, NECA will pay the attorney costs, and at a later date, may seek reimbursement from the Foundation.

The Foundation’s Board of Trustees emphasized that the cost-cutting measures, while regrettable, were done to protect the organization and the members’ investment in the valuable industry research the Foundation provides. The Talent Initiative, ELECTRI International Student Competition, MEI course development, and research process will all continue. Meetings for the year will be held as scheduled. While the Foundation will be doing more with less this year, NECA has pledged its full support and strength to ensure a successful outcome to this situation.

Any questions about the Foundation can be directed to John Grau, jmg@necanet.org, or Mike Thompson, jmt@necanet.org.