||| FROM MICHAEL RIORDAN |||
The current attempt to amend the Eastsound Water Users Association bylaws is fundamentally flawed and should therefore be abandoned.
Like the US Constitution, the bylaws of an organization are a compact or contract between its members and the individuals elected or appointed to represent them. Bylaws grant powers and assign fiduciary responsibilities to a board of directors, who are expected to follow these guidelines in acting on behalf of the organization’s members. Amendments to the bylaws should therefore reflect the majority will of the members, who consequently must have significant participation in drafting them.
But this has not been happening in the current EWUA amendment process, which is largely being imposed on the members by the directors, starting back in September 2023. From knowledgeable sources, I recently learned that a major impetus for amending the bylaws began with a demand from the current general manager. That’s just plain wrong. And given a threatened recall effort at the time, several directors wished to make it more difficult for members to initiate such actions. But that objective is obviously not in the best interests of the members, as it favors challenged directors who want to remain in office.
One seriously needed amendment that several members recently advocated was an open-meetings provision, in which all board meetings would be open to membership attendance and possible participation. It also required that the minutes of these meetings eventually be published on the EWUA website, to keep interested members who could not be present appraised of board decisions and actions. But this proposal has been largely ignored by the board-dominated bylaws committee, which even included a provision for closed meetings in the draft amendments.
And in all the draft amendments I have seen thus far, there has been no provision for their ultimate ratification by the full membership. This is a major flaw. Yes, there is indeed a provision — including in the EWUA Articles of Incorporation — for the members to propose and approve (or reject) amendments at the annual meeting. But doing so is a cumbersome process unlikely to succeed, no matter how meritorious the motivations. In this age of the internet, however, board-approved bylaw amendments can easily be submitted to member ratification, with (say) the majority of respondents deciding the outcome.
When I was Vice President of the View Haven Estates homeowners association, I led a bylaws amendment process that aimed at separating the Secretary/Treasurer office into two positions. I chaired a committee consisting of myself and two regular members, which suggested draft amendments that were then approved by the board of directors. According to the association’s existing bylaws, these were then submitted to a vote of the entire membership, which approved them by the required two-thirds majority.
Such a membership ratification measure should be included in the EWUA bylaws.
But what is truly disturbing to me is how this EWUA amendment process began — initiated by certain directors in a thinly disguised attempt to mollify the general manager and to make it more difficult to remove them from their positions. (And that thousands of dollars were paid an attorney for associated legal expenses.) It is yet another example of the tail wagging the dog, a fitting metaphor that has increasingly come to characterize EWUA operations in recent years.
Fortunately, there is a provision in the current bylaws that proposed amendments require the approval of five of the seven sitting board members. That means a minority of three board members can effectively block and therefore rescind any draft amendments before them. In this case, thankfully, the majority does not rule. A supermajority is needed.
I therefore urge the responsible minority of the current EWUA board to vote to reject the bylaws amendments being proposed and thus to short-circuit the current, deeply flawed process.
Once that vote succeeds, we can begin the amendment process anew but this time do so in a manner that involves EWUA members as equal partners in the endeavor.
Thanks for this latest, incisive analysis of a major issue at EWUA, Michael. I wholeheartedly agree with your assessment that their (that is–our) Bylaws revision process be re-started, due to the various flaws that have clearly emerged in how the process has proceeded to this point. The Articles of Incorporation also need to be amended to reflect current reality.
I recently requested a visit to review and copy documents related to EWUA legal, CPA/accounting and contracting expenses for 2023, per RCW 24.03A.215, and General Manager Burke responded with a detailed email (but no documents to review). He mentioned that $13,927.50 had been paid to a law firm for “consultation related to the Association’s outdated bylaws.” Though this was a relatively small proportion of the over $100,000 spent on legal fees in 2023 (vs. $4,000 budgeted), I wonder if this large expenditure was reasonably justified; why not hand a final draft to attorneys to review rather than embed them in a process that the Board and Members should have fully controlled?
I do appreciate the fact that Manager Burke replied to my information request within about a week, though he did not invite me to review any documents or invoices, and wrote “I am not authorized to provide the underlying invoices for legal services…” leaving me to wonder, who does hold that authority? He did conclude “…your inquiry cost the Association 4 hours of GM time, 3 hours of legal assistance and 3 hours of Board involvement. That dollar amount is roughly: $1,650.”
I would have been happy to drop by the EWUA office to review documents that might have taken 15 minutes for the EWUA staff to pull. Instead… three hours of “legal assistance?” Somehow, our Management and Board have wandered deep into some strange morass, and us Members need to help find a way back to normal operations once again. Such as re-starting the Bylaws revision process, with full stakeholder involvement from the start, this time?
Or might we desire to got state ran, to avoid all this good old boy back door deals.
May anyone suggest that we shut it down as a cooperation and go to state ran like the Sewer district?
Seems that the managis watch better by the state as is also the board.
I suggest changing the Association to a district.
Melissa Lowry has a point worth discussing.
Quite frankly, I do not believe that Dan Burke understands how to manage a non-profit 501(c)(12) cooperative like EWUA, which is mandated by the IRS to provide water services at “least possible cost.” He calls in expensive big-city lawyers and accountants willy-nilly to address issues that could be better dealt with locally. And the result is over $101,000 in 2024 legal expenses and over $53,000 in accounting. All told, that’s over $154,000 — or almost $120 per EWUA member. For comparison, his predecessor Paul Kamin averaged under $16,000 in legal and accounting expenses in his last seven years as general manager.
What is wrong with this picture?
In April of 2023, the General Manager of EWUA threated to sue the Association. One of the demands made by the GM to forestall the suit was a revision of the bylaws. In my opinion, the modifications being proposed invest more power in the hands of the GM and make it more difficult for the Members to challenge Board actions. The initial drafts included a provision for a governance committee that would be able to limit who would be allowed to put their name in as a candidate for the Board. That provision is not in the current draft but I believe the intents is still there. The Board can create committees at will and invest in those committees whatever powers it wants subject to the limits set by state law and the bylaws.
Hmmmm. Maybe I should put in a well…… is that even allowed?
@Bob Thomas it would be nice if we had other options. Normally when I discover that an organization is corrupt, mismanaging funds, or otherwise exhibiting practices that do not align with my values, I can simply choose not to support the organization. However, EWUA is a water utility that people cannot just opt out of. A major system failure could bring the whole island to its knees. That’s why I’m continuing to speak out even after I was bullied off the board.
The plant that produces about half of EWUA’s water is 10+ years past its projected life expectancy.
Instead of devoting its efforts and resources into developing feasible repair and replacement plans for our aging system, the current leadership is spending its time and thousands of dollars to hide historical records and keep competent Secretary/Treasurers (myself and Carol Ann Anderson) from seeing the books. At this point, I don’t even care what deals have been made in the past as long as they don’t prevent us from preparing for the future.
Does anyone believe a crime has been/is being committed?
The GM should report to the customers the board represents.
Some board members claim theirs is an “executive committee “ that makes Decisions while Other Baird members who are trying to effect transparency and disclosure of items like the budget, accounting and financial
Reporting , are not aware of an Executive Committee.
How can a public service provider prevent the
Members From knowing how and who is spending their fees and on what?
If a crime has not been committed how they are treating their
Customers should be.
Legal advice given to any organization is generally privileged, even against its members. Members (co-ops and associations), stockholders, and customers of a water district do not have the right to see legal communications to the respective boards or managers, or to see billings that describe the legal services rendered. I know this gives rise to paranoid imaginings, but the reality is usually quite the reverse: legal fees are expended by a board or general manager because matters weren’t attended to earlier. This is an area where confidence in board members, and through them, the manager is most important.
@Bill…re: “confidence in board members, and through them, the manager is most important”.
Unfortunately, when a manager writes himself checks totaling in excess of five figures for highly questionable purposes, and to which a Board gives its okay, “confidence” is in short supply.
@Stephen…re your question…Some folks would answer your question in the affirmative, given that there has been no effort (that I’m aware of) at restitution.
In my book, confidence and trust are earned, not bestowed…best to start over with revisions to the EWUA Bylaws.
At another tumultuous monthly EWUA meeting, the Board rejected a motion offered by Carol Ann Anderson and seconded by Jim Cook that the current flawed bylaws process be terminated and a new process be initiated in which regular Members are given equal representation. Jim Nelson, Leith Templin, Michael Cleveland and Teri Nigretto voted against it while Anderson and Cook voted in favor. Ron Claus was absent and not voting. In the unlikely event that he joins the majority, it’s clear that they do not have the five votes needed to pass the current round of amendments, so this process is probably dead on arrival, as the two camps are deeply entrenched in their positions. That was obvious from the vote on a prior motion to return Anderson to the Secretary/Treasurer office. The same two blocs voted had exactly the same way.
What happens next is anybody’s guess.