Why Is the EWUA Board Defending a Botched Election?
by the Concerned Eastsound Water Users
The recent stunning admission by Board President Teri Nigretto that the Eastsound Water Users Association has allegedly incurred some $60,000 in legal fees trying to defend what is probably an indefensible series of mistakes in its 2023 elections process boggles the mind. It looks like EWUA is headed for the second successive year of more than $100,000 in legal expenses under Dan Burke’s management.
During the previous year, EWUA spent $101,240 for legal expenses, of which $71,390 was for “general employment” matters, according to an email Burke sent to Robert Austin. “This total is significant, in large part,” he wrote, “due to considerable time that was spent during the last half of the year resolving an employment dispute, paying out severance/settlement to resolve the dispute, and considerable costs incurred with the forensics investigation [that was involved].” From Burke’s statement, one can safely conclude that the bulk of the expenses were incurred in response to legal actions threatened by him and his attorneys.
In November 2023, it is beyond doubt that there should have been three director seats up for election, not two. Board President Clyde Duke had been appointed to his directorship, not elected, and his expiring seat was due for election, too. Those managing the election somehow neglected these facts, and when challenged on the error in early November, they refused to correct it before the results had been finalized. The responsibility for such a blunder therefore falls either on previous board members or the general manager, or both.
It’s also beyond doubt that Jim Cook came in third in the voting tally. Had there been a third slot on the ballot, as there should have been, he would have been elected a director. Many EWUA members would have voted for him, had they been given three votes instead of two. But the newly elected board decided instead to appoint him to a one-year term and then kept him effectively off the board until after Leith Templin had been appointed to fill the position Joe Cohen had vacated by resigning in mid-November. No persuasive reason has been offered yet for these decisions, which may be why Farm to Market LLC sued in San Juan County Superior Court to overturn the election.
It seems that a middle course and settlement can be pursued here that would avoid tens of thousands of dollars more in legal fees and the potential hardship of repeating the 2023 elections. With agreement of the parties, the judge could decide that Cook was in fact elected to his director position, not appointed, and that excluding him from the subsequent appointment process was invalid. That, of course, could invalidate Templin’s appointment and thus her subsequent replacement of Carol Anderson as Secretary/Treasurer. But it would be a preferable result to having to repeat the 2023 elections, which is a possible outcome if left solely to the judge.
In Nigretto’s statement, which appeared in the Orcasonian and was emailed to EWUA members, she was mistaken in using the term “fiduciary” in the phrase “fiduciary duties as Board members.” She claimed that these duties had been violated by Carol Anderson and Ron Claus when they submitted affidavits in the Farm to Market LLC case. But the word “fiduciary” primarily describes a board member’s core responsibility to represent the rights and interests of the members of an organization, not one’s fellow board members — which is secondary. If a director reasonably thinks that the interests or rights of these members are being violated, then s/he has the duty to say so, no matter what the board majority says or thinks. That is what Anderson and Claus did by submitting sworn affidavits to the court.
By the same token, the members of the board majority may in fact be violating their own fiduciary responsibilities to EWUA members by pursuing a risky attempt to preserve the results of an obviously flawed election process and remain in control — spending more than $60,000 of members’ money to do so. Is it in the members’ interest to continue this shaky, costly defense in such an effort?
All told, EWUA has now spent over $160,000 for legal fees in the last 18 months, or close to $10,000 per month under Burke’s management. If this trend continues — and there’s every indication it will indeed continue under the current board’s “oversight” — the total could easily exceed $200,000 by year’s end. With some 1,000 members, that’s about $200 per EWUA member, or more than twice an average monthly water bill.
Surely there are far better ways to spend EWUA members’ money — for example, on much-needed pipeline replacements and overdue upgrades of our water-treatment facilities.