Did the ECA Board’s Resolution Pre-empt Rights of Sewer Users?

On April 5, 2013 the Eastman Board of Directors unanimously passed a "Resolution on Transfer of Assets of the Eastman Sewer Company”. This was done after a nearly 18-month campaign by the ECA Board, the ESC Board and officers to convince the VDE and the community to have the VDE take over the Sewer Company. The ECA Board was determined to undermine a group of Sewer users who wanted to form a separate municipal sewer district. Why did it make sense to form a separate Sewer District? Because otherwise the SEWER USERS ARE A VOTING MINORITY in the Water District (VDE) with only 1/3 of the membership and no control over their costs.

Stated explicitly within that Resolution in the section entitled: NOW THEREFORE are the following two statements:

1.    “BE IT FURTHER RESOLVED, that the Board of Directors has determined that the creation of a separate Village District is not in the best interest of the Association.”

We are unaware of any formal documentation that the Eastman Board of Directors has presented to the members of the Eastman Community Association to substantiate this Resolution Statement. We are unaware of any ECA study having been performed with any criteria being established, whereby such a determination could be made by the members of the Eastman Board of Directors. We do not believe that there is any authorization in the community Declaration of Covenants documents providing the Board of Directors with the authority it gave itself in making this statement. We believe that the Board's judgment was seriously flawed, unsubstantiated and discriminatory toward some members of this community. We therefore view the submission of this Resolution to the Board of Selectmen of the Town of Grantham as un-authorized and an inappropriate act against Eastman community members’ best interest.

An even more serious offense is the perception of “Conflict of Interest” regarding the Board's activities preceding this resolution. Maynard Goldman, ECA Board President and ESC Board member, participated in the Non-Public (illegal) VDE February 7, 2012 session held by VDE officials in violation of the New Hampshire Right to Know law.

In the January 19, 2012 (Illegal) Non-public Session Minutes it states in a paragraph labeled EASTMAN SEWER COMPANY--

"Eastman Sewer Company has asked the VDE to consider taking over the operation of the Sewer Company........"

In the February 7, 2012 (Illegal) Non-public Session Minutes  it states that the following parties were in attendance:

For Eastman Sewer Company

·      Board representative Brad Moses

For Eastman Community Association:

·      General Manager Ken Ryder

·      Assistant General Manager Brian Harding (also manager of the ESC),

·      ECA Board President Maynard Goldman (also ESC Board Member)

The minutes go on to clearly document that it was the desire of Mr. Goldman to see to it that the VDE acquired the ESC in what we view as the beginning of a pre-emptive deal between the parties in a private session held in violation of the NH Right to Know Laws by the VDE Commissioners. This meeting lay the groundwork for the subsequent campaign that Mr. Goldman led to make sure that no one in the community other than his chosen VDE Commissioners acquired the Eastman Sewer Company.

On March 18, 2014 the VDE Commissioners pleaded guilty to violating the New Hampshire Right to Know law RSA 91-A on at least three separate occasions: 1/19/2012, 2/7/2012, 2/15/2012. The minutes of those Sessions are entitled Non-public Sessions (Commissioners’ Meeting).

A second statement from the “Resolutions” reads:

2.    “BE IT FURTHER RESOLVED, that the Board of Directors does not support the transfer of assets of the Eastman Sewer Company to a separate Village District and further resolves to take all actions necessary to protect the assets of the Association and the rights of its membership.”

"To protect the assets of the Association"?

Given that the assets of the Eastman Sewer Company were being sold for One Dollar, there were no assets of value to protect in this particular transaction. There is no evidence that a separate Sewer Municipal District would have in any way been harmful to the Eastman Community Association. Such a claim is without merit and is biased toward some community members.

"..... and the rights of its membership"-- What rights?

Any rights that may have existed as far as membership in the community association relative to the Sewer Company terminated upon sale to any party outside the Community Association. Once again this statement like the others, is without merit and lacks credibility.

Clearly, the ECA Board felt very strongly that the Sewer users not be allowed to form their own District. It is also clear that as it pertains to these particular two statements within the “Board Resolutions”, that the Board acted on its own and not on behalf of all ECA members or the Association. Furthermore, as it pertains to all monies expended in pursuing this sale: legal fees, employee time etc., the Board should reimburse the Community for its actions and costs incurred.

It is our perspective that the Eastman Board of Directors exceeded what would be defined as “reasonable acts” for a 501(c)4 community Board of Directors as it pertains to the above portions of the Resolution and it's submission of that document to the Grantham Selectboard.

Did the ECA Board obtain a legal opinion from the ECA legal Counsel on the contents of this resolution, particularly the two statements enumerated above? There is no indication that ECA’s attorney expressed any legal opinion but merely attached the resolution to his letter—as stated below:

“The Board agreed to have Mr. Cirone send a letter to the Grantham Selectboard informing them of the ECA Board’s actions.” (Source ECA Board Minutes 4/5/13)

Submitted by Robert Logan