Holley Navarre Water System’s (HNWS) Board of Directors may have been skating on thin legal ice Dec. 18 as they voted to approve a budget for 2019, possibly in violation of the utility’s bylaws.
While historically the budget has been approved in December for the past decade, board member Daryl Lynchard questioned whether that practice was in-line with the system’s governing document based on Article 9 Section E.
“The report prepared by such accountant shall be submitted to the members of the corporation at their annual meeting, together with a proposed budget for the ensuing year,” the bylaws read.
That annual meeting is set for the January each year and coincides with the board elections.
At issue were the words “shall” and “proposed.”
Board President Will Goulet argued that the language was not binding.
“It says shall. It doesn’t say must,” Goulet said. “But I’m not an attorney.”
When asked if the budget was prohibited from being approved in December HNWS attorney Keith Kilpatrick said it was prohibited.
“Anything before that would essentially violate that section,” Kilpatrick said.
Later in the meeting he seemed less sure that it would be a violation saying the board could present “the proposed budget that we have already approved.”
“It doesn’t necessarily say we can’t go ahead and approve a budget. We just have to make sure we have it prepared to present to the members by the annual meeting,” Kilpatrick said.
Board members expressed concerns that by not approving the budget at the Dec. 18 meeting the water system would not be able to conduct business for a month.
“If we approve it today then it would not be a proposed budget,” Lynchard said.
When asked if that meant Lynchard had broken the bylaws by approving previous budgets while on the board, he said yes.
The issue of when the budget is finalized carries extra weight because of the Jan. 15 election of four board of director seats. That election could flip majority control of the board.
Whoever wins the election would take their seats on the board immediately during the annual meeting of the members, meaning they would decide the final budget based on the language of the bylaws.
However, board member Mark Miller said the budget approval would be temporary and able to be amended by a vote of the board at the January meeting.
The board approved the budget with Lynchard abstaining from the vote.
In public forum yet more protests were lodged by members against the hiring process for newly appointed CEO Rob Williamson, who was given the position without advertising it to the public.
Past board member Debbie Gunnoe said that she was voted off the board for pushing to make a hiring without doing an open search.
Three of the current sitting board members were the ones that voted her out.
“If it was wrong then, it is wrong now,” she said.
Gunnoe then called for all the board members involved in the decision to resign.
Member Carmen Reynolds spoke as representative of a collection of members. Each had signed a petition requesting several documents including:
- Policies and procedures for closed meetings and redaction of transcripts
- Conflict of interest policy
- Finalized job description for the CEO position with date of finalization
- Williamson’s resume
- Williamson’s signed employment contract
- Documentation of Williamson’s job duties as executive of Fairpoint Regional Utility System, Inc.
- Request for proposals for the solicitation of legal counsel and resulting applications.
Navarre Press has formally requested the job description, Williamson’s resume, employment contract and all recommendation letters regarding the hiring. That request was denied. Williamson said it would require a vote of the Board of Directors to provide those documents.
When asked about a job description Dec. 5, retired General Manager Paul Gardner said he could not provide one.
“If there is one, I have not seen it. That would be a question for the board of directors,” Gardner replied.
Gardner said when he was hired as the general manager, he had to go through a competitive application and interview process despite having been trained as Assistant General Manager for two years prior.
When members asked Goulet to produce a job description Dec. 18, he said he was unable to do so saying he was not prepared for the question.
Lynchard then asked if he could provide emails in which the board members discussed the position.
“That’s up to you along with a whole list of other things that you shouldn’t have,” Miller replied.
Based on those emails between board directors, several qualities and requirements were discussed.
Some of the qualities described in the emails do match the work that Williamson did while serving as a County Commissioner including knowledge of local, state and federal regulatory practices, but many of the requirements were not met.
The minimum requirements suggested by Miller and Lynchard would require at least 5 years of experience as a CEO, CFO or General Manager of a large business or nonprofit as well as a bachelor’s degree in a related field such as accounting, business management or economics.
Williamson’s bachelor’s degree is in sociology.
The qualifications described in the emails by Miller also call for “knowledge/experience in municipal utility operations.”
Water system member and board candidate Mike Kennedy publicly called into question the hiring. He said based on HNWS meeting transcripts, discussions of competitively seeking a CEO/CFO for the company date back to February.
During those discussions members specifically talked about seeking out a third-party firm to conduct a competitive hiring process for candidates.
When speaking about hiring decisions for other positions, Miller was critical of hiring and promotion decisions made without advertising the positions.
“Why was that job not posted and offered to people within and without the organization to make sure that the most qualified person is being put into that job?” he said according to the transcripts.
Members of the water system are now asking Miller and the other board members who supported Williamson’s hire the same question.
“Did you as a board do your due diligence in representing the members,” Kennedy asked.
“No, I don’t think we did,” Lynchard replied.
As seen in the Jan. 3 issue of Navarre Press.
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