Valley News -

By Diane Sieker
Writer 

Community Hall meeting covers business membership loophole

 

Last updated 11/23/2018 at 12:27am

Diane Sieker

Secretary Barbara Keller, left, President Noel Donahue and Director Keith Richardson open the meeting of the Anza Community Building Board of Directors Thursday, Nov. 15.

The Anza Community Building Board of Directors met Thursday, Nov. 15 at the Community Hall. The meeting was well-attended by about 35 members.

Present were Noel Donahue, president; Barbara Keller, treasurer, and Keith Richardson, director. Secretary Kimberly Patke and Director Mike Parke were absent due to extenuating circumstances. 

After the pledge of allegiance, the board accepted a special gift from the High County 4-H Club.

Donahue began the meeting by explaining the special business of the evening, a proposed change to the Community Hall's governing bylaws. 

"My friend and fellow board member, Donald Seddon, acted in a way, which I felt was unacceptable and inexcusable for a board member," Donahue said. "As board president, I requested his resignation because I lacked the power to remove him. I expected no opposition to that request. The need for his resignation seem obvious to me. It is unclear how anyone outside the board heard about my request but there was a claim that my request was a violation of the bylaws and that a board member can only be removed by a vote of the membership."

Reacting to that community member complaint, Director Dan Robinson asked the board of directors to hold a specially called working meeting to discuss Seddon's actions and the request for his resignation. 

The board voted that Seddon should compensate for the damage he caused but remain on the board rather than honor Donahue's request for his resignation.

Tracy Boulton, aware of the damage caused by Seddon, was informed that the board would not support Donahue's request for his resignation, and Boulton asked for a copy of the bylaws to see what procedure could be used to accomplish Seddon's removal from the board.

In Boulton's examination of the bylaws, he found a loophole. The Community Hall allows business memberships with voting privileges. Anyone with enough money could form a large number of shell corporations with Anza addresses, buy memberships for those corporations and obtain enough votes to totally control the Community Hall. 

The only defense against this hostile takeover would be to publish a notice for 30 days of the intent to change the bylaws. To meet that deadline, Donahue decided to act immediately. According to Article VIII, Sections 1-2, of the bylaws, any proposed change in the bylaws must be given to the board secretary, posted on the Community Hall bulletin board and published in the local newspapers. No meeting or vote by the board was required. 

"I sent the proposed bylaw change to the secretary and both newspapers. I have complied with the process required by our bylaws," Donahue said.

At this time, Seddon reconsidered his position and resigned from the board. The need for Boulton to spend money forming companies and buying memberships just to have Seddon expelled no longer existed but the loophole remained in the bylaws. The membership voted on a bylaw change to close that loophole.

Additionally, Donahue said, "We have since started a thorough review of the bylaws and found numerous other provisions that need to be changed, clarified or added. We can only vote on the change which has been publicized and posted for 30 days tonight. We will publish and post the other changes within the next month so they can be voted on in January."

The voting on the motion to make the singular bylaw change, as posted, was accomplished by show of hands, and Donahue made a ruling on the vote and acting secretary Keller recorded the ruling.

The meeting moved on to the next order of business. Currently at least one member of the Community Hall owns multiple business memberships. The board either needed to grandfather those extra votes in until those memberships expire, because they were purchased with the idea that they came with voting privileges or the board would need to offer a full refund of those business membership fees. A vote by a show of hands agreed to grandfather the memberships.

Treasurer Keller reported on bank balances, line of credit and pending reimbursement. It was explained that the line of credit was needed to provide the front money for expenditures approved by the grantor and ultimately paid back by the grants. The line of credit had been paid off and closed. 

Donahue read the president's report.

The Community Development Block Grant award for 2015-2016 has been closed out, pending the final audit, which will be done simultaneously with the audit for the CDBG award for 2017-2018.

The CDBG award for 2017-2018 was received for Americans with Disabilities Act upgrades to the bathrooms and building entrances. 

"Thanks to the amount of volunteer labor we received we were able to complete the bathrooms. I want to personally thank Jeff Miller, Nathan Morse, Jim Nelson, Mike Strickland, Sean Donahue, Cori Wyse, Zeke Wassgren and Mike Patke, Tim Hofus and Sean Holmquist for their hours of donated labor which made these bathrooms possible," Donahue said. 

The ADA-compliant double entry door arrived with a damaged frame. A new frame has been ordered. New ADA-compliant doors and hardware will be installed at both front entries.

The grants came with the requirement of a specific type of federal audit that will cost in excess of $10,000. If the Hall needs to publish a request for proposals seeking bids on that audit that will add another $4,500 to that cost, basically eating up the remainder of the grant money. Donahue had asked the grantor to approve allowing them to have their current tax attorney and his certified public accountant firm to do a far less expensive review of the grant expenditures and produce a statement. If approved, that savings, combined with what was saved using volunteer labor should allow them to purchase a generator for the Community Hall. 

When the kitchen was built, it was added to the building without obtaining any permits. The board had to create kitchen plans, pay for the permits and make the required upgrades to make the kitchen legal. 

"During that process, an unknown Anza resident filed repeated complaints about the kitchen drain," Donahue said. "That person apparently knew things about the drain that we did not know. An illegal cesspool had been installed many years ago to handle the discharge from the kitchen sinks. Once discovered, the Department of Environmental Health, immediately shut-down all operations in the Community Hall."

The Community Hall and kitchen was reopened under a temporary agreement with the county which required the immediate removal of the cesspool and the installation of a temporary holding tank to give them time to comply with a permanent solution. With the permission of the Department of Environmental Health, James Lanik installed the holding tank which is now serving as the temporary solution.

The Community Hall board hired a civil engineer to investigate possible permanent solutions. He discovered that they cannot pass a percolation test on the east side of the building off the kitchen; however, a percolation test would pass on the west side of the building where the existing bathroom septic is, but that existing septic and leach field are both too small and would need to be upgraded. Because of the set-back requirements from the well, building and property lines, the hall does not own enough property to fit the enlarged septic and leach field on the west side of the building. The Department of Environmental Health has suggested that they obtain more land on the north side of the building on which to install the septic system. 

"We are looking into the possibility of buying some land or having it donated, for that purpose," Donahue said. 

Dollar General received approval from the planning commission Oct. 3, which allows the plan-check to move forward. The Department of Environmental Health has threatened to hold up the issuing of the permit, until the hall's kitchen septic system issue is resolved.

What the developer of the Dollar General store is doing for the Community Hall in exchange for tying into the well is that they are paying for the costly well upgrades being required by the Department of Environmental Health and the ADA upgrades to the parking lot and ramps into the building. Making these ADA upgrades was a condition of receiving the grant funds the hall already received, so doing the septic instead of these ADA upgrades was not an option.

Recently Missy Boulton of Missy's Place, located in the Community Hall, has decided to form a nonprofit corporation, solving some details with conflicts arising from having a for-profit restaurant in the nonprofit Community Hall. It means it will be much easier to remain in compliance. 

The Community Hall secured a $40,000 line of credit for front money which is reimbursed through the grants. Because of the Cranston Fire Relief and the speed at which the ADA upgrades occurred, the Community Hall was slow in submitting the requests for reimbursement. The effect of those delays is that they exhausted the line of credit and still had expenditures which needed to be paid. 

"I gave the Community Hall an interest free, short term loan of $14,000 and used my credit cards to pay for other expenditures," Donahue said. "This was all done with the full knowledge and approval of the grantor. The legality of the transactions have been confirmed by our tax attorney and all the grant expenditures are subject to a federal audit. The claims that anything illegal has occurred are completely baseless and those rumors are being spread by people with an axe to grind. The line of credit has been paid off, along with the $15,000 I fronted on my credit card. I will be paid back the remaining $14,000 as the next couple reimbursement checks come in."

A condition of the grants was that the Community Hall must hire a project manager. They had to list the project manager's name and qualifications on the grant applications. 

"We used my husband's 38 years as a contractor and years of experience doing other projects including flipping houses as the qualifications as of that project manager. We were forced to pay for workman's compensation insurance and pay federal prevailing wage for that project manager. Last year Bill netted just over $12,000 in pay as that project manager and made donations back to the Community Hall in an amount $100 greater than his net pay. Nothing in the law demanded he donate any of that money but we are not doing this for financial gain. In the second grant we have a similar situation where my husband is using his net pay to pay expenses which can't be covered by grant funds," Donahue said.

To settle more rumors, Donahue added, "While our personal finances are nobody's business, Bill and I have owned a vacation property on Kauai for about 40 years. We often go there several times a year. We do not need any money from our volunteer work in Anza to continue those vacations. Because of our financial situation, I was able to loan the Community Hall $14,000 and charge $15,000 on my credit card without the expectation of any interest in return."

Numerous other deficiencies or unclear statements in the bylaws will be addressed in the future. There is no conflict of interest policy, code of conduct or definition of duties. Donahue proposed that the new board of directors make a thorough review of the bylaws and post suggested revisions within a month so they can be voted on at the January meeting. 

The board has already started a review. A simple announcement of the coming vote on these proposed changes will be published in the local newspapers. The full text of the proposed changes will be posted on the bulletin board in the Community Hall and will be made available upon request. 

Diane Sieker

From left to right, the new Community Hall Board: Noel Donahue, Keith Richardson, Terry Gormley Seddon, Barbara Keller, Jonathan Schmidt, Barbara Janelle and Krystal Dinnyes at the Anza Community Building Board of Directors. Not shown: Secretary Kimberly Patke and Director Mike Parke.

Nominations were held for the four open positions on the board and five candidates selected. Voting was held by written ballot, counted and recounted by Keller and Richardson and the winners revealed.

Krystal Dinnyes, Barbara Janelle "BJ," Johnathan Schmidt, Terry Gormley Seddon were voted onto the board.

A motion was made to apply for a renewal of the line of credit and a show of hands approved the motion.

Community Hall Board meetings are open to the public, and everyone is encouraged to attend.

Anyone interested in becoming a member of the Anza Community Building Inc., can call (951) 428-0901. Memberships are $20 per person or family with one vote per family or person and $35 per business with one vote. Cash and checks are accepted.

For more information, visit the Anza Community Hall on Facebook at http://www.facebook.com/groups/337754646415866/ or on the web at http://www.anzacommunitybuilding.org.

Diane Sieker can be reached by email at [email protected]

 

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