To: Scott Egan, John Murphy, David Yerkey

From: Larry Bruce

Re: Your 3/17/04 Correspondence

Date: March 25, 2004

Thank you for your letter in response to our March 3 meeting.  The KXCI BOD has considered your response to the election procedures outlined in my March 3 letter.  As you are aware, at the March 18 BOD meeting, the Board voted unanimously for a motion directing me to continue to work with the Democracy Initiative to resolve the outstanding issues regarding your petitions and the proposed bylaw election. 

Regarding your points of objection:

1. Independent certification of signatures:  You were requested to provide examples and documentation of any election process triggered by a signature petition which did not include a bona fide independent verification process.  Your March 17 letter does not respond to this request.  Your assertion that independent certification is unnecessary is not persuasive.  The participation of an objective and neutral third party to resolve any conflicts during the certification process guarantees a fair process for both the petitioners and the Board.  Why would you wish to circumvent the independent certification process if such a process would actually help validate your petitions?

2. The election booklet:  You were asked to provide alternative bids, but have chosen not to do so.  Your objection to the proposed design and cost of the election booklet is noted.  Your suggestion for design does not accommodate the inclusion of an alternative bylaw amendment by the BOD. (see #3)

3. Alternative Bylaw amendments:  Your objection to the BOD offering an alternative set of bylaw amendments is noted.  You have not offered any legal justification for this objection.  The BOD reserves the right to offer an alternative set of bylaws for consideration by the membership.  The BOD is currently involved in an extensive review of the bylaws (we welcome your suggestions) and may propose a set of bylaw amendments for approval.  It would be ridiculous and costly to involve the members in two separate bylaw amendment elections in less than sixty days.   This will not disadvantage you in any way, as the Board has already stipulated it will cover its costs associated with any alternative set of amendments.

4. Election Management:  You have objected to using the Foundations CPA to manage and certify the election, implying some bias or preference toward the BOD.  Frizzell, Senkerik & Co. are licensed, certified and bonded by the State of Arizona.  Is it your contention that Frizzell would violate their fiduciary responsibility in managing this election?  The BOD is committed to selecting an election manager of the highest credibility and honesty.  We believe Frizzell passes this test. 

5. Staff Costs:  The bylaws clearly state that the petitioners shall pay all costs for any election brought by petition.  The election could be totally executed by an independent entity, but this would likely cost far more than the low estimate of staff costs offered by the BOD on March 3.  It is the BODs position that time spent by the staff on election management is part of the total cost of the election and would be far less expensive than any alternative.

As we discussed on March 3, the Democracy Initiative and the BOD are involved in an adversarial process, as your letter clearly indicates.  The interest of both parties and the members would best be served by bringing in an objective third party to resolve the points of disagreement.  The BOD is committed to an election procedure that will serve for this election and for future petition based elections.   The BOD will not compromise on any issue that would affect the validity and efficacy of this election.  The BOD will not compromise on any procedure which would set a bad precedent for future elections.  To do so would violate the Boards fiduciary responsibility and its commitment to the members.

The BODs position on the following issues is not negotiable:

·        Third party independent certification of signatures is required for the election to proceed.  This will include contacting at least 15% of the petitioners to confirm their intent to call a bylaw election.

·        The BOD reserves the right to offer an alternative set of bylaws for consideration by the members, which may be included in the election mailing should your petitions be certified.

·        This election will be managed by a third party who is licensed and bonded by the State of Arizona.

·        Staff costs will be included in the cost of the election.

·        All election costs must be paid in advance.

It is clear that you do not agree with the BOD on these issues.  In the interest of the members and the station, may I remind you that the Board offered you independent mediation on February 10 and again on March 3.  That offer remains open. There is no need for an acrimonious election.  The Board has already moved on two of your proposals and is in the midst of a total review of the bylaws.  You claim to be operating in the best interest of the membership, however your continuing objections to the Boards proposals for a fair and valid election procedure which will serve the Foundation now and in the future seriously undermines your credibility.  Your objections are a disservice to the station, its members and those who signed your petitions.