To all EWUA Members,
You may have received an email from a former EWUA Board Director, Mr. Steve Smith, dated August 20, 2023. Mr. Smith has also posted a communication in The Orcasonian and perhaps other social media networks. The letter contains numerous false and misleading accusations about the EWUA Board and staff.
The EWUA Board is bound by its fiduciary duty to maintain the confidentiality of certain Board actions and meetings from Executive sessions. Mr. Smith and Ms. Hall are similarly obligated to maintain that confidentiality, even after Board service – but have evidently elected to ignore those protocols. Accordingly, your EWUA Board will not engage in a public debate on Mr. Smith’s false and extremely misleading narrative of events during the past year, as it is neither productive nor beneficial to the community we serve.
However, because Mr. Smith’s allegations relate to the financial integrity of this Association, we have deemed it necessary to respond to a few crucial points to Mr. Smith’s letter:
• On March 16, 2023, the Board received a letter from legal counsel representing General Manager Dan Burke. The letter asserted professional mistreatment by Mr. Smith and Ms. Hall specifically, which could have led to costly litigation against the Association, Mr. Smith and/or Ms. Hall.
• The Board immediately activated existing EWUA legal counsel to address this letter from Mr. Burke’s attorney.
• Legal counsel for the parties negotiated a settlement agreement with certain conditions – including Mr. Smith’s removal from the board either voluntarily or by Board action.
• The Board requested Mr. Smith to voluntarily resign, both in response to the threatened litigation and in light of his mishandling of his duties that unnecessarily dragged the Association into an expensive and time-consuming legal dispute. He steadfastly declined to do so.
An independent forensic accounting firm was engaged to examine EWUA finances and search for the wrongdoing Ms. Hall and Mr. Smith had alleged, and to make recommendations on financial protocols to improve the Board’s financial oversight. No financial malfeasance or misappropriation of member funds was found.
Rather, the investigator found that Mr. Burke’s cash out of PTO appeared to be noncompliant with the employee handbook, which may have resulted in a small overpayment of the managers own earned PTO. Any possible violation appeared to be potentially inadvertent, and the Association had no legal basis to reclaim any paid wages. The investigator then provided a list of financial recommendations to resolve this and other issues, and the Board adopted implementing them unanimously. Solutions have been implemented for all recommendations provided by the accounting firm.
Despite the fact that the Board vigorously investigated the alleged malfeasance, they found no evidence of misappropriated funds and unanimously adopted all the investigator’s recommendations to improve its financial oversight functions, Mr. Smith has continued his campaign to undermine the Association and spread misleading information about its operations. It is our collective belief as your existing Board that Mr. Smith’s motivation in posting such misinformation is to seek personal vindication after the Board voted to remove Mr. Smith from the EWUA Board on June 21, 2023.
Should you have any questions or concerns about the Association’s processes and adopted policies to improve the visibility and integrity of its bookkeeping practices, we encourage you to reach out to the Board, and we would be happy to address any concerns.
Clyde Duke, Board President
James Nelson, Board VP
Scott Lancaster, Treasurer
Joseph Cohen, Secretary
Michael Cleveland, Director