"Sleazy" (?) Eastman Board Ignores Members Again

You be the judge after you read the following letter submitted by a long time resident.

                                                                                                                                                   March 2, 2016

Board of Directors

Eastman Community Association

P. O. Box 53

Grantham, NH 03753

Dear Board Members,

I first purchased in Eastman in 1984. I left in 2000 for a two year employment opportunity in Scotland. When I returned I purchased my current residence at 2 Winding Wood Road in late 2002, when special places were still special. For those of you who don’t know, this is in the Spring Glen Special Place.

I was notified of the relocation and construction of the new VDE office building in late October by a man who was walking by my house. He told me that the Springfield Planning Board had just approved the plan to build the new office on the merged lot abutting my property. I asked why it wasn’t going up next to the maintenance garage and he said that there wasn’t enough room because of an easement issue. I thought it was odd that this was the first I heard of it being an abutter and all. I said if I couldn’t see it from my house I didn’t care. He assured me I wouldn’t.

Imagine my surprise when they clear cut 70% of the lot. I already live with the traffic on the access road to Springfield and the noise from the pickle ball court which will now be even louder due to the clear cutting. Now, not only will I see the building and lighted multi car parking lot, but also the dwelling across the street which I have never seen before in 13 plus years. And this new view of a modular 2 story building on a slab can be seen from 5 of my 7 rooms, 1 of my bathrooms and my entire deck. Two people on the Eastman Environmental Committee told me they were told to stand down in this case. You would have thought that the board was smart enough to insist that the VDE follow EEC regulations to ensure buffer zones etc. as part of giving them the easement.

I sought legal counsel after appearing at a Springfield Board of Selectmen’s meeting. The Concord law firm told me unfortunately what the ECA board had done was legal, albeit very Sleazy. He said that the perpetual easement was done instead of a sale to circumvent a change of use from rural residential to commercial which would require a variance and need abutters’ approval and also not trip the Retired Lot Program which requires abutters right of first refusal for retired lots.

Frustrated I went back and reviewed the BOD meetings and found that at the BOD on October 26th Mr. Paul Hoffman voiced objections to granting the perpetual easement as it was contrary to the lot retirement program. Mr. Ryder replied the lot retirement program allows retired property to be used in the best interest of the community. Let’s examine that statement.

1. The general fund received no money for the merged lot. Had it been offered to an abutter (me) it would have received at least $6,200.00. Best for the community, I think not.

2. The VDE has to float a municipal bond for $250,000.00 for construction of the facility. Municipal bonds have to pay interest yearly for the life of the bond. Where will the money come from, the customers, through increased water and sewer rates to cover an expense that is an increase to their operating budget.

3. I talked to 2 of our leading real estate brokers about what this will do to property values. Both said it will have an adverse effect on the abutters and that a rippling effect will occur in the neighborhood. Now I’m sure this will have no effect on Mr. Goldman’s residence on the 7^th green but it will affect a portion of Spring Glen properties. Best for the community, again, I think not.

Maybe Mr. Ryder needs a post graduate course in economics to understand that an increase in the operating budget and reduced real estate values are not in the best interest of the community.

Did any of you even drive down to the site to see what impact there might be on the abutters before you voted?

The VDE has been operating in 300 square feet for twenty years. Reasonably intelligent people know they could run this operation from a store front at Rum Brook. To erect a 2200 square foot facility is overkill. 

In closing I would like to say to the 3 new BOD’s who ran on inclusion and change that, in my opinion, you failed miserably with one of your first votes.

And I would like all you to consider if you would have voted yes if this was next to your property.  I think not.

 Regards, Mike Downes

 603-359-5682

They say they have done nothing illegal which is what was said on Wall Street in 2008. Did we think the bar was higher than that? Not on Wall Street and not at Eastman.

 

ECA Board's Financial Failure

In an Eastman Blog posted on 4-5-15 called FACTS OR FINANCIAL FOOLERY click here we referenced an ECA governance document produced to justify the South Cove build-new project entitled "South Cove--a Decision for the Future of Eastman". On page 15 of that document is the following specific commitment to fund the new South Cove building project-

Bullet # 3 states:  

"Increase the membership fee from $3000-$5000 for house/condo beginning April 1, 2009......when a lot is improved, an additional $4000 will be payable to Capital Reserve Fund. Note: if the Council fails to approve an amendment to the Declaration of Covenants and Restrictions required to increase the membership fee in June of this year, the special assessment will increase to $360 per property for eight years or $2880.”

There has been no accounting, accountability or reconciliation on the part of the general manager/CEO (Ken Ryder) of the Capital Funds raised or how those funds were spent by Mr. Ryder because he does not work for the community; he works solely for the 9-member Board period. (see above Blog posting for details) There is an annual accounting for the membership fees paid “source of funds” however there is no corresponding "use of funds”.

The current fiscal year FY 2016, is the final year of the eight year annual $250 special assessment per housing unit payment ($2,000) for the $4.5million  loan taken out for South  Cove. If you look at the FY 2014 Audit Report, you will find on page 11 a reconciliation of this loan's status:

The long-term outstanding debt amount at the end of FY2014 (3/31/2014) was $1,727,683 on the South Cove loan. The current portion ( paid in FY 2015) was $464,871 leaving a long term debt excluding this current portion, of $1,320,906 to be paid in three more installments (FY 16, 17 and 18).

Bottom line—the outstanding South Cove debt as of 3/31/2015 is $1,320,906. The incremental revenue received from the 4/1/2009 membership fee increase NEVER went to pay off the South Cove debt. No Accountability = Member Financial Ignorance and now your ECA Board and Ken Ryder are playing the same tune/deception to the ECA members with the Center:Build New/Renovate funding
shell game.

Contributed by Bob Logan who is the CEO of a consulting practice since 1993 which provides expertise on improved business, financial and operational performance as well as leadership.

Facts or Financial Foolery?

In Feb 2008 when financials were being put forth by then Council Chair Garth Rand and then Board President Goldman in a publication called South Cove: A Decision for the Future of Eastman, ECA members were told (on p. 2) of that official document, that “a report commissioned by a community similar to Eastman showed that a project such as the South Cove Activity Center can add as much as 10% to property values".

On page 13 there is an estimated Operating Cost Comparison of the old South Cove building showing a cost then of $97,000 accompanied by a “build new” cost chart showing $135,000 annually.

On page 3, there is a table titled “Projected Annual Cost per Property” that shows a total Cost per property (of South Cove) of $334 average per year-- 2008-2015. The projected cost for 2016 is shown as $95, a $239 cost reduction per property--Has anybody seen this cost reduction in their assessment?

The FY 2009 Budget approved on Feb 2008, has an annual assessment of $2125 for each condo/house for 1311 Eastman housing units. The recently authorized FY 2016 Budget contains an Annual Assessment of $3272 for 1323 condos/houses. An Assessment increase of $1147 or 54% is NOT a cost reduction.

In the past eight-year period, 12 houses in total have been built here at Eastman or slightly more than one new house per year. In that same eight-year period, 83 vacant lots have been retired shifting their entire assessment cost to the remaining owners--as well as the town tax revenue for those properties has been shifted to these remaining owners. In addition, several hundred acres of land have been acquired by our Board-- using several hundred thousand dollars of Eastman community’s monies.

Meantime, requested due diligence on the part of Eastman's General Manager and CEO has been rejected by the ECA Board. See Post Board Refuses Member's Due Diligence Request In a letter from Board President Goldman to us on 11/21/14, he stated:

 “To put it simply, the General Manager does not work for the Logans nor for any other ECA member(s)

….the GM is hired by the Board and is answerable solely to the Board.”

ECA members are thus mandated to put total faith in the financial and verbal assertions of its governance and Dave Philippy et al. Previous unaudited ECA financial statements and commitments are anonymous, erroneous, misleading and no one in governance is accountable to ECA members for their content.

Contributed by Bob Logan who is the CEO of a consulting practice since 1993 which provides expertise on improved business, financial and operational performance as well as leadership.

Board Refuses Member’s Due Diligence Request

Bamboozled Again??

As ECA members, we filed the following financial information request with the Board on August 13, 2014. (See Letter to Ken 8-13-14/Board below) Versions of this request have been filed with Trip Anderson, Burpee Hill Special place Chair as well as Larry Schulman, Dave Philippi, TCBC Chair, Ken Ryder, to all Council members and other community officials. The Board, in its refusal rejected financial accountability to its members.

By voting to go forward with funding and building a new Center, ECA Council and Board members refused to require proper accounting and disclosure for hundreds of thousands of dollars already spent on the Center. There is absolutely no excuse for this abdication of responsibility. In essence the ECA Council Members, Board and Dave Philippy’s Committee have told ECA Members/Owners to take a hike. There is no due diligence document whatsoever that supports the need to spend that outlandish amount of money to destroy a 17-year-old building. 

The Board letter and Financial Information Request submitted are below:

Robert F. Logan  

August 13, 2014

Board of Directors

Dear Board Member:

At the request of General Manager Ken Ryder I am submitting this financial information request (see below), for your approval and immediate action. In Mr. Ryder's request to me he specified not by email nevertheless, I am submitting it by email and will follow with a hard copy.

As a separate request I am requesting that the Board spell out exactly the financial information an ECA member is entitled to obtain from the general manager, his or her staff. This would also include financial information that would be posted and easily found on Community's website. A number of the towns in the Upper Valley do this quite well including Hanover which is a good benchmark.

Thank you for your service to the community,

Robert Logan

Bob,

Please submit your request in writing (not email) to the ECA Board of Directors.

Cheers,

Ken

From: R & G Logan [mailto:rlogannh@yahoo.com] 

Sent: Wednesday, August 13, 2014 10:48 AM

To: Ken Ryder

Subject: Financial Information request

Ken, 

I am requesting that you provide the following Center financial history to me and that you make it available to all ECA members:

Financial History--Accountability that includes a detailed inventory of all capital expenses for the building done since it was built including:

•          Cost of the tavern addition

•          Cost of the upgrade work that was done for the kitchen and the furnishings for Brian McKenzie (Pleasant Lake Inn) when he agreed to a contract to operate the restaurant. In that contract were stipulations to upgrade the facility which included:

◦       Upgrading the kitchen

◦       Renovating and upgrading the furnishings, light fixtures etc.

•          Cost of the Draper Room re-designs and re-decoration which has been done at least twice.

•          Cost of upgrading the building air-conditioning system

•           Cost and scope of all repairs and upgrades that have been done in the entire building including the pizza ovens, the kitchen air-conditioning, the septic system etc. since the building was built.

•          Cost of all major operational/maintenance items which have exceeded $10,000 (in the 3 years FY11, FY12 and FY13, we paid almost $500,000 to a corporation owned by a unit owner and a unit owner for repair and maintenance—Note M Audit Reports)

STEP 2: Capital Improvement Requirements--Before any Renovation or Build -New Plan is authorized by any governance entity, we're calling for a required second step.  This second step would be as follows:

·         The detailed cost list in priority order of required renovations categorized as follows:

a.    Must do: 0-12 months / Dollars per major item  

b.    Need to do: 0-12 months/ Dollars per major item

c.    Want to do: 0-12 months/ Dollars per major item 

d.    A similar list created for 12 to 60 months

These detail costs need to be fully disseminated and fully vetted with the entire community.  

It is expected that most of this information would be contained in the Annual Capital Budget Requirements. In the Annual Budget there is a Capital Projects List in priority order with a line drawn after a given proposed “capital-spending amount”. (FY2015 Budget p. 107-108).  We are unable to find any Center Projects listed for the Center in the FY2015 Budget.

The current condition of the Eastman Center is and has been your responsibility as general manager for the past 11 years or so. 

We as members of this community who have paid all costs for capital and operating expenses to maintain our community's infrastructure have a right to a complete accounting of how the Center Building is in the claimed poor physical shape that has been portrayed by committees and others in governance. All Eastman owners have a right to full disclosure of the appropriate financial records and information.

Regards,

Bob

Sincerely,

Robert F. Logan

Contributed by Bob Logan who is the CEO of a consulting practice since 1993 which provides expertise on improved business, financial and operational performance as well as leadership.