More than a power source

Brunswick Electric typifies commitment
of cooperatives to support rural communities

By Steve Thompson
Writer-Editor
USDA Rural Development
stephenA.thompson@usda.gov

Editor’s Note: This is the first in a
series of 3 articles examining electrical coops
that are heavily involved in community
development.


here’s an 84-year-old woman in Winnabow, N.C., who knows what community involvement by utility co-ops means. The woman, whom we’ll call Mrs. P., was living on a small, fixed income and having trouble paying her bills. So she wrote to the President of the United States to ask for help.

Her letter wound up on the desk of Hilda Gay Legg, the administrator of USDA Rural Development’s Rural Utilities Service. Legg got in touch with Mrs. P.’s electric cooperative, the Brunswick Electric Membership Corporation (BEMC).

Robert W. “Chip” Leavitt Jr., the CEO of BEMC, sent someone around to look in on Mrs. P., who was a life-long member of the co-op. What he found was an elderly lady confined to a wheelchair, living in an old house with heat only in one room and few resources to improve her home.

This started a chain of events that shows that the rural tradition of taking care of neighbors is alive and well. The co-op employee brought Mrs. P. some food treats and a small Christmas tree. He got in touch with a relative at the sheriff’s department, whose employees got together a package of food, supplies and clothing. Meanwhile, employees of the co-op took up a collection for her, and contacted the appropriate local officials to make sure she was getting all the government help to which she was entitled. Leavitt even got help to pay Mrs. P.’s gas bill.

Electric co-ops’ have vital
stake in community welfare Helping out Mrs. P. is only one example of the ways Brunswick Electric participates in the life of the communities it serves. BEMC, like utility cooperatives around the country, has a policy of using its resources to improve the economic and social conditions of the areas it serves. Besides helping out indigent members, Brunswick takes an active role in improving educational opportunities for students, encouraging the development of small businesses and providing funding for causes as diverse as obtaining and training police dogs, cultural programs, transportation for disabled veterans, raising funds for hospitals and sponsoring a local baseball tournament.

BEMC’s activities are part of a long tradition in rural America, where electric co-ops have played important roles in community life since the first were founded in the 1930s. As the only nongovernmental organization that serves all families living in a service area, an electric co-op is a true grassroots organization with a unique position in rural communities.

Annual membership meetings are important social events that bring people together from miles around. Politicians running for office have traditionally found an electric cooperative’s annual meeting or picnic an ideal venue for pressing the flesh and kissing babies.

After the immense job of electrifying rural America was accomplished, electric co-ops remained engaged in their members’ lives in many other ways. Many have used their resources to encourage economic development, by setting up revolving loan funds for business ventures and other uses. Business incubators are operated by some utility coops to help launch new business.

Building hospitals and community centers and purchasing emergency equipment are other common activities of power cooperatives. Power co-ops use their positions as community institutions to encourage other entities to participate in partnership efforts, and their fiscal expertise to raise and administer funds. USDA Rural Development’s Rural Economic Development Loan and Grant program is one source of funds for these purposes (see sidebar).

BEMC working to
stimulate economy
BEMC’s service area is in southeastern North Carolina, a region that has suffered economically in recent years due to shutdowns in local manufacturing and declining farm incomes. The co-op has responded to the situation in a number of ways, including providing facilities to encourage the development of small businesses, a tactic used by utility cooperatives around the country.

BEMC tackled the project by setting up a spin-off corporation, the Rural Consumer Services Corporation (RCSC), in 1989. The co-op financed RCSC through partnerships with a number of local and national entities, including the Rural Electrification Administration (now USDA Rural Development’s Rural Utilities Service), the Farmers Home Administration (whose business, community and housing programs are now part of Rural Development), and the North Carolina Technological Development Authority. Further funding and other support came from local community colleges, local development organizations and local businesses and individuals.

The first funds were used as seed money to open a Business Development Center in Whiteville, N.C., in 1991. Two more centers were later opened, using additional funding, in nearby Winnebow and Tabor City. The facilities offer inexpensive commercial space, including office space, for new and expanding small businesses. The rental fees include high-speed Internet hook-ups, access to light office equipment (including fax machines and copiers), secretarial support, conference rooms and training facilities. Each Business Development Center can accommodate professional offices, service businesses and even light manufacturing.

“We have really enjoyed our partnership with Brunswick Electric and the business development center,” says Sandra Gore, president and owner of Coastal Temporary Services, which “graduated” from a BEMC incubator. “They encouraged us, they gave us the opportunity to open our own business and it has been a great success story. Without the opportunity to be in this building [the BEMC incubator], we would not be in business today.”

Leavitt notes that the co-op minimized expenditures of members’ funds. “The basic approach was for BEMC to serve as a catalyst for the project,” he says. “Our investment was not in membership dollars, but primarily in staff and management resources to develop partnerships, pursue other financing sources and garner community support for the project.” BEMC did provide a loan of $128,000 to help finance the building in Winnabow. (see sidebar).

RCSC is now self-supporting from rental income. Annual expenditures for the business centers total $160,000, including management and technical support, maintenance, utilities, etc. Since the first center opened in 1991, the program has housed 32 businesses and helped create almost 800 new jobs. In a struggling rural area, this is no small contribution to economic health.

Bright Ideas
Another co-op program seeks to improve education for students in its service area. The Bright Ideas program, which began in 1994, offers grants to local teachers for educational projects in kindergarten through high school that otherwise would not be funded. Since the program’s founding, all of the 27 electric distribution co-ops in the state have joined. Together, they have distributed over $3 million.

Three years ago, BEMC joined the Touchstone association of power cooperatives, which provides marketing resources and assistance to members. Bright Ideas and other community programs are now presented under Touchstone’s auspices as well as BEMC’s.

This year’s lineup of BEMC Bright Ideas awards emphasizes reading skills. One school got a grant to build a “literacy room” to supplement the library. The literacy room, designed to be cozy and inviting, is staffed by volunteers who coach children in reading. Part of the grant was used to buy books tailored to different reading levels to allow teaching each student at his or her level of ability.

Another grant bought portable bookshelves that are brought into classrooms and the books to stock them. All of the projects are the brainchildren of individual teachers, who apply for grants independently of their school administrations.

The funds for this and other community efforts come from an auction of surplus co-op equipment and vehicles, held every year at the co-op’s annual meeting.

“The annual amount from this auction varies, but as a non-operating source of funds, it doesn’t impact the members’ electric rates in any way,” says Leavitt. “Someday we’d like to move into a full “Operation Roundup” giving program, that would involve the entire membership.” (Operation Roundup has been adopted by a number of utility cooperatives. Under it, utility bills of participating customers are rounded up to the nearest dollar, with the excess going to fund various community and charitable initiatives.)

Even without utility bill checkoffs, however, the co-op has been able to start up a new community effort with auction funds. The Community Grants program is designed to help family services, cultural and arts programs and emergency services and economic development projects.

Judy Gore, BEMC’s vice president for customer services, says “the Bright Ideas program shows that with a relatively small annual investment in our community, we can make a big difference. We wanted to expand that investment to include worthwhile programs that provide important social, cultural, educational, and economic services to all citizens in our service area.”

The first awards under the new program include help for a sheriff’s department in setting up two canine teams, funds to buy a van to transport disabled veterans to medical care, a grant for a science exhibit at a local museum and a lighted marquee for an elementary school.

A reliable partner
Formal programs are important, but, as Mrs. P. found out, they are only one aspect of the co-op’s participation in community life. “Our communities know that they can count on BEMC for support,” says co-op spokeswoman Linda Thomas. “We really try hard to maintain that close connection.”

One example of this is sponsorship of a youth baseball tournament. For the past two years BEMC and Touchstone have helped host the Beach Diamond Invitational Baseball and Softball Tournament, held for three days during spring break. This year, 16 teams participated in the tournament in the town of Shallotte, some coming from as far as Virginia, Kentucky and Maryland. The co-op commissioned a professionally-designed logo for the tournament and provided T-shirts for all the participating team members.

Another example is a Southport charity golf tournament to raise funds for the National Shriners Children’s Hospital in Greensville, S.C. For two years Brunswick and Touchstone have been the major sponsors of the event, which is organized by the Brunswick County Shrine Club. More than 125 businesses and individuals joined in sponsoring the event last August, which raised $35,000.

Other contributions to community life include providing space for community groups to meet at co-op headquarters, encouraging employees to participate in community activities, participating in local parades, sponsoring breakfasts for volunteers, and providing raffle items for fundraisers.

The BEMC leadership sees nothing remarkable about such activities, regarding them simply as part of the co-op’s natural role. “While our core business is providing safe, reliable and affordable power, we are also committed to helping our community,” says Leavitt. “That’s part of the tradition of electric cooperatives.”



USDA’s REDLG program

The Rural Economic Development Loan and Grant (REDLG) program, administered by the Rural Business-Cooperative Service of USDA Rural Development, provides zero-interest loans and grants to Rural Utilities Service-financed electric and telephone utilities. The funds are to be used to promote sustainable rural economic development and job creation projects. The utility is required to re-lend the funds, at zero-percent interest, to an eligible third party. These third-party recipients may be private or public organizations having corporate and legal authority to incur debt. They can include businesses, nonprofits, municipalities and other entities. Eligible purposes include: Priority is given to financing third-party recipient projects that are physicallylocated in rural areas having a population of less than 2,500 people.



Funding Business Development Centers

Brunswick Electric Membership Corporation (BEMC) development affiliate, the Rural Consumer Services Corporation (RCSC), was selected by the National Rural Electric Cooperative Association (NRECA) to participate in developing a video presentation and “toolkit” for utility co-ops on promoting economic development. The following is an overview of the Business Development Center project, excerpted from material provided to NRECA:

Leveraged Funds/Source
North Carolina Electric Membership Corporation
zero-percent economic development loans, to RCSC,
guaranteed by BEMC, for the construction of the
Winnabowand Tabor City buildings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$950,000
BEMC 5-percent economic development loan
to RCSC for the construction of the Winnabow building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $128,326
For the construction of the Whiteville building and
access road (which are owned by BEMC and leased to
RCSC):

USDA Rural Economic Development Loan (repaid) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000
North Carolina Technological Development Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $185,000
North Carolina Rural Economic Development Center Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 30,000
USDA Industrial Development Grant . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . $ 32,000
Columbus County, N.C., provision of in-kind services to build the road to the facility . . . . . . . .. . $ 32,000

Other Partners

The ongoing management of RCSC Business Development Centers is made possible by the continuing partnership between BEMC, RCSC and the Small Business Development Centers at two local community colleges. Southeastern Community College provides on-site management for the Whiteville and Tabor City facilities, and Brunswick Community College in Supply provides the management for the Winnabow center. Both community colleges also provide business counseling services and entrepreneurial training programs.

Lessons learned
What might have been done differently




July/August Table of Contents