ECA Board Acts to Eliminate Community's 501(c) 4 Qualifications

In recent years the ECA Board, under the leadership of President Maynard Goldman, has taken steps to eliminate the ECA's 501(c) 4 qualifications. These actions include but are not limited to:

1)    Declaring Eastman an ENTERPRISE. This was achieved through private Board and other ECA members designing undisclosed accounting reporting changes to Eastman FY2011 and before Financial reports. These financial reporting changes were implemented in the FY 2013 budget process in the late fall and early part of 2012. No open or transparent communication occurred with community members prior to the implementation of these financial records changes.

At the December 20, 2011 Board meeting I called attention to the fact that the Board had violated its own ethical principles which includes as Bullet 2:

Encourage Open Transparent Discussion Of Matters Relevant To The Well-Being Of The Eastman Community And Its Members. The financial records and reports of The Eastman community are relevant to the well-being of the Eastman members!

What is an ENTERPRISE???

The ECA Board did not bother to state the definition of ENTERPRISE. One reasonably accepted definition is found in the City of Manchester NH Financial Reports for 2013 on page 99.

ENTERPRISE FUNDS:

Enterprise funds are used to account for the operation of the city that are financed and operate it in a manner similar to private business enterprises. The intent of the governing body is that the cost of providing goods and services to the general public on a continuing basis will be recovered or financed primarily through user charges.

In Manchester's case it defines such operations as being "certain operations of the Parks and Recreation Department" and their Parking Fund. They exclude “Government Services” such as security, roads etc.

Here at Eastman it appears that the ECA Board has defined the entire governance operation as an ENTERPRISE through changes to our community’s accounting statements. This decision to define Eastman as an ENTERPRISE conflicts with the IRS published definition of what qualifies as a social welfare organization under section 501(c) 4.

The IRS publication states "An organization is NOT operated primarily for the promotion of social welfare if it's primary activity is operating a social club for the benefit, pleasure, or recreation of its members, or is carrying on a business with the general public in a manner similar to organizations operated for profit."

2)    Certainly, the Eastman Golf Club operation is a business by any definition and now apparently so is the former community. Recently a financial FY2014 Golf Profit and Loss income statement been distributed by General Manager Ken Ryder. It concludes that Net Income (for golf) was $52,702.36. Assumedly, the community will be reporting this profit to the IRS and paying the required income taxes on it. Of course that will be yet another cost to ECA members.

Why would the Board do this? Perhaps they want to change the Eastman Corporate structure to a Homeowner’s Association, where Eastman owners would have fewer rights and recourse.

Submitted by Robert Logan