||| BY MICHAEL RIORDAN |||
At its February 13 meeting, the Eastsound Water Users Association board once again punted on the question of revealing its financial condition. Doing so yearly is required by the EWUA bylaws which state that the Secretary/Treasurer (or, by delegation, the general manager) must “keep an accurate accounting of the funds of the Association and make an annual report to the membership.” But as far as I can tell from the minutes — and from the meetings I have attended since last August — no such report has been made in over a year.
During the opening public comment period, Robert Austin asked a related question, “Is it the position of the manager and board that they will only provide members with the minimum amount of information required by law?” To which
Secretary/Treasurer Carol Ann Anderson essentially answered yes, that they will provide what is required by the recently passed RCW 24.03A. Given all the turmoil of the past year, it may be understandable that the EWUA board wants to pull in its wings and reveal, as Austin characterized it, “a lack of transparency regarding how members money is being budgeted and spent.” To which President Teri Nigretto said they were “trying to be as transparent as possible, consistent with protecting the Association.”
Washington state law requires that non-profit corporations make their annual financial statements — which include a profit-and-loss statement and a balance sheet — available to members who request them. As the books for 2023 were officially closed on January 31, 2024, according to General Manager Dan Burke, that information should now be available. But he said these records were still under review and could not be released until that was finished. One could hope that this will occur over the next month, so that the 2023 financial statement can be released at the March 19 board meeting — and published on the EWUA website so that all members can access it.
Attention turned next to the ongoing EWUA bylaw revisions, which Vice President Jim Nelson said were close to wrapping up; the revised draft would be sent to all members soon, at least ten days before any board action could be taken on them, as
required. Board member Jim Cook raised the question of whether there should be a membership vote to ratify these changes, pointing to provisions for member input in the 1955 EWUA Articles of Incorporation, which supersede any bylaws. Nelson claimed that they would look into this.
Another bylaws question concerned Robert’s Rules of Order, which currently apply only to voting at the annual meeting and then only at the discretion of the president. Almost all non-profits I’ve been involved in require that these rules apply
uniformly to all meetings — of both the board of directors and membership. Board opinions differed on this issue.
Taking up the 2024 budget, Burke said they were now looking at the two-year 2023-2024 budget to determine if any “tweaks” were needed. “Ultimately, we look at cash flow,” he stated. “Do we make enough to pay the bills?” Which will include the capital costs of the improvement projects slated for 2024. Back in the December 2022 special board meeting at which this two-year budget was adopted, the board had voted to approve a roughly 10 percent increase in water rates — both base rate and usage rate — which one would hope will be sufficient for these purposes.
But “January was wild!” said Burke in recounting recent staff efforts. The frigid 10-degree weather revealed a lot of weak points in the systems under EWUA management or maintenance. The worst of these occurred in the big pipe leading from
Cascade Creek to the Olga filtration and storage system, which had frozen solid and needed to be thawed out while Olga residents were told to conserve and boil their water. EWUA recently took over responsibility for maintenance of the Olga water system, but does this apply to the repairs and upgrades that will obviously be necessary there?
We will be eagerly looking forward to the presentation of the 2023 financial records and statement at the March board meeting, as it was suggested might occur then, after reviews of these data are complete. Doing so would help comply with EWUA bylaws and begin to dispel the clouds of suspicion that have been steadily gathering in recent months, when official business has often been transacted in closed “working sessions” or special meetings — for which the minutes have yet to be published.
Openness and transparency like this would go a long way to resolving the EWUA “culture of secrecy,” as one observer dubbed an increasingly troublesome characteristic of the Association’s management.
In my view, this article shows that things are not going in a new direction at the EWUA board, notwithstanding the three newly elected board members. It appears that the culture of secrecy has increased rather than diminished.
EWUA is a member-owned non profit cooperative…not a Silicon Valley start-up. Accordingly, it’s members deserve prompt and complete financial information regarding its past and planned future operations at the very least…I would think that a community-minded board would bend over backwards to provide information to its members.
Back when Paul Kamin was running the show and when I served on the board, I know that Paul was gracious with his time whenever a member or board member came to him with questions about EWUA operations and finances.
When board president Teri Nigretto, as quoted in this article, said that the board was “trying to be as transparent as possible, consistent with protecting the Association”, I’m beginning to wonder if their efforts are more focused on protecting the General Manager.
The financial report should also include line items for the additional water systems managed by EWUA to ensure that EWUA members are not footing the bill for Olga, Doe Bay, and Rosario. This level of transparency is essential especially given the potential conflict of interest with Vice President Nelson sitting on both EWUA and Doe Bay boards.
Also, to my knowledge, EWUA has not provided a financial report to its members since I moved to Orcas approximately 3.5 years ago. This is unacceptable for a non-profit water utility. As Treasurer, it was one of my many goals to remedy this negligence before I was pressured off the board.
One thing which may have been contributing to the culture of secrecy at EWUA is that at the first meeting of the new board, the General Manager drafted and presented to the board a Confidentiality Agreement which he required the board members to sign. When asked what it was to cover, the GM said “everything”.
In any event, this Confidentiality Agreement, as written, expired on February 15th.
With its expiration, perhaps we will see the board, or individual board members, more open to revealing some of the inner workings of the Association, information which any community-minded organization would want its member-owners to know and thus be confident that their interests are being advanced.
You bring up an interesting point, Tenar. Given this conflict of interest, Nelson should be recusing himself in any vote or other action that involves the Doe Bay water system. But since the minutes (if any) of several closed board meetings since November have not been published, we don’t know whether he has complied with this norm, which I believe is required by state law.
GM REQUIRED board members to sign? GM works for the board, not the other way around.
Board should ORDER the GM to disclose information or fire him.
But then I live in the old world where the people used to run things.
Nelson did recuse himself from the vote to take on Doe Bay and to my knowledge there has not been any official board action regarding Doe Bay since. The same can be said about Olga and Rosario. This lack of action should be justified with numbers that show EWUA is not taking a loss with this arrangement. During my time all the Board was presented with was the income from the additional water systems, we were not presented with the expenses.
It is possible that managing these water systems are impacting the fulfillment of overdue capital projects. For example, when I asked why a particular overdue pipe replacement project had been push back a couple more years, I was told it was due to lack of bandwidth. How much bandwidth is EWUA spending on other water systems?
I am all for islanders helping islanders but EWUA needs to make sure we have plans in place for our aging system.
All that said, it is possible that EWUA has a healthy symbiotic relationship with the other water systems. In which case, the current board should be sure to include this in its financial report.
Noticed your comment about the water GM. Thanks Phil; the same is certainly true of the fire Chief. She refuses to work in support of our new board. Shame on you Chief Holly. Let’s work together and stop your challenges to the voters will. My board’s constitutional authority regarding contol of you is well estabished.
I’ve been reviewing the Orcas Fire and Rescue website, which appears to be a model of the sort of transparency we should expect. You can read the ten page employment contract with our new fire chief, which includes exactly what her pay and benefits are. Minutes of Board meetings are available to download in both PDF and audio recording formats. Financial information is up to date and presented in a clear, clean manner. I would suggest to the EWUA Board and General Manager that this is the model they should take going forward, and not “everything’s confidential unless we’re required by law to tell you.”
Interested readers can find the OIFR public records, including the 2023 financial statement and 2024 budget at:
https://www.orcasfire.org/public-records/
You can even find the Fire Chief’s 2023 and projected 2024 salaries there. Talk about openness!