Members of Cherryland Electric will decide this week who will serve on the cooperative’s board of directors for the next three years. It’s a routine governance procedure for the member-owned co-op, but it’s sparked some controversy this year because one of the candidates is Jim Dyer, Leelanau County’s newly-hired county administrator. Critics claim Dyer winning a seat on the Cherryland board would constitute a conflict of interest with his Leelanau County employment, if not an outright breach of contract. Dyer, for his part, vehemently disagrees.

There are three seats up for grabs on the eight-member Cherryland board, and five candidates running. One of the seats is set aside for a representative from the Benzie/Manistee/Wexford area, and the only candidate seeking that seat is incumbent Valarie Handy, current vice president of the Cherryland board. The other open seat is a director-at-large position, with incumbents Melinda Lautner and Dean Adams defending challenges from Dyer and Brian Fenlon.

All Cherryland members are eligible to vote in the election – though early voting, including online voting, is set to close at noon today (Wednesday). Members can also vote in person at Cherryland’s annual meeting, scheduled for tomorrow, Thursday, June 12 from 4-5:30pm at Incredible Mo’s in Grawn. All ballots will be tallied during that meeting, with results announced in real time.

While Cherryland Electric has 38,000 members, CEO Rachel Johnson wrote in a blog post in May that only 8-12 percent of the membership typically participates in elections. The utility has been promoting this year’s election heavily in hopes of boosting that number. So, too, has the Groundwork Center for Resilient Communities, a nonprofit that has provided endorsements and financial backing for Dyer and Fenlon’s campaigns. In an email sent to subscribers on Monday, Groundwork praised the two candidates as supporters of clean energy “who want to make our grids more resilient and reliable to face the changes in the decades to come.”

Amidst the extra attention, at least one Leelanau group has expressed concern about Dyer’s ability to serve on the Cherryland board. Taxpayers of Leland Township (TOLT) ran an ad in the Leelanau Enterprise last week suggesting that it would be a conflict of interest for Dyer to take the director-at-large seat, given that Cherryland “sells electric power to the County Government Center” and that Dyer “oversees county contracts and operations” in his capacity as county administrator. Cherryland also leases space on one of Leelanau County’s communication towers.

“Serving on both sides of this relationship creates the appearance – and risk – of a conflict of interest,” the TOLT ad proclaimed. “As a lawyer, Dyer should know better.”

TOLT’s Tony Borden, a former two-term Leland Township trustee and a lawyer, also outlined his concerns about Dyer’s candidacy earlier this week on The Ron Jolly Show on Traverse City radio station WTCM.

Speaking to the Leelanau Ticker, Borden says his worries about Dyer serving on the Cherryland board reach beyond a potential conflict of interest. Borden also cites Dyer’s contract with Leelanau County, which bars the county administrator from engaging “in any employment or business” outside of his duties with the county, “except as specifically approved in writing by the board…” Since Cherryland board positions are compensated, Borden believes Dyer would be breaching his contract by taking a seat on the board without prior approval by the Leelanau County Board of Commissioners. Dyer did not seek such approval before running for the board, and the matter has never been discussed or voted on at a Leelanau board meeting.

“[Dyer’s contract] has these very specific provisions about what he can and can’t do, and from the get-go, he’s basically ignoring it,” Borden tells The Ticker. “My question is, if he's going to do this right from the get-go, what's he going to do later on?”

Dyer disagrees almost entirely with Borden's read of the situation.

“I’m kind of surprised this has become an issue at all, because there has been a Leelanau County commissioner on the Cherryland board for over 20 years,” Dyer says. He’s referring to Lautner, a Cherryland board incumbent who, up until this year, was also Leelanau’s District 7 representative on the county board. Lautner lost her longtime county commissioner seat in November’s election, but is still, for now at least, on the Cherryland board. By Dyer’s estimation, if a county commissioner serving concurrently on the Cherryland board didn’t merit a conflict, then a county administrator serving on the same board shouldn’t raise eyebrows.

“A county commissioner actually has a vote [on county business]; the administrator doesn’t,” Dyer reasons. “No matter what I might negotiate, the county commission has to approve that contract [with Cherryland].”

As for TOLT’s breach of contract concerns, Dyer argues that his own contract’s outside employment clause is irrelevant to board service.

“Cherryland board members are not employees of Cherryland, by definition,” Dyer says. “If you look at the bylaws of Cherryland, not only does it say board members are not employees, it says they can't be employees. So, while my contract does say I can’t be employed anywhere else without board approval, this would not be employment. I've been on a number of charitable boards over the last 40 years in my career – some of them compensated, some of them not compensated – and that work has never been considered outside employment by anybody that I've ever worked for. Because it’s not. It’s a non-employee fiduciary.”

Nevertheless, Dyer admits that failing to run his candidacy by the Leelanau County board was an error in judgment. “In hindsight, I’ll admit it was probably a mistake on my part, that I didn’t ask them ahead of time,” he says.

Asked for their thoughts on the controversy, both Steve Yoder and Ty Wessell – the current chair and vice chair, respectively, of Leelanau’s Board of Commissioners – agree with Dyer’s arguments.

“Obviously, I cannot speak for the board, but I can speak as an individual regarding Mr. Dyer’s candidacy,” Yoder wrote in an email to The Ticker. “I certainly do not view Mr. Dyer’s candidacy as a conflict of interest or a breach of contract in any way. In fact, reviewing the Cherryland bylaws, I would interpret [the board role] as not an employment position but rather a director position, which is an elected position.”

“Cherryland board members are not employees,” Wessell concurred. “They oversee, but do not run the utility. Since board membership is not outside employment, it is not subject to the terms of the administrator employment agreement. If a commissioner, who does have a vote on the county board, did not a have a conflict of interest during Commissioner Lautner’s tenure, it seems obvious to me that an employee, who does not have a vote on the county board, does not have a conflict of interest.”