In Providence Superior Court last Friday, Central Coventry Fire District (CCFD) Special Master Richard Land, went before Judge Brian Stern to request that the court authorize him to conduct a special election for new members of the district's currently vacant board of directors.
"Due to the delicate nature of the District's current operations, the Special Master believes that holding an election to fill vacancies on the Board should be held as soon as possible," said Land in his petition to the court.
Despite agreeing that a new Board should in fact be elected, Land, along with counsel for the Town of Coventry and firefighters' union, state representatives and several taxpayers voiced their concern about a number of election-related stipulations that had to be determined. Questions arose regarding if the Board should be elected or court-appointed, for what period shall the newly elected members serve, by what process the election should occur and what powers, if any, shall be vested in the new Board.
Due to the uncertainty of the above points, Judge Stern declined to offer a ruling that day, promising to submit a written decision later in the week. On May 17, a court document was released containing Judge Stern's decisions on all aspects of such an election.
The complete decision can be viewed in the attached PDF document.
In his ruling, Judge Stern immediately disclosed his opinion that a new Board should be formed to fill the vacancies created by the court-ordered resignation of the former members.
"Regardless of whether the Special Master retains all powers and the Board remains advisory or not, this Court finds that it is in the best interest of the Special Mastership estate, the taxpayers of the CCFD and also in the public interest to constitute a new Board," he said.
While it would be possible to select Board members through an election or court appointment, Stern expressed the need for a new Board to have the approval of the Central Coventry taxpayers.
"This can only occur though a vote of the taxpayers, whereby, after considering a diverse group of candidates with differing points of view, the voters can determine for themselves which of the candidates they believe will represent their interests as members of the Board," said Stern in his ruling. "Although this process will take more time and may involve greater expense than an appointment of the Board by the Court, the need to have the Board be true representatives of the taxpayers outweighs both of these factors."
The election to fill the vacancies on the Board of Directors shall proceed as follows:
- A 14-day period commencing May 20, 2013 and ending June 2, 2013, during which candidates may qualify for election and submit applications for candidacy. Special Master Land will make the proper forms available at the CCFD administrative offices, the Town of Coventry Town Hall, as well as on his website;
- A Special Meeting and election shall be held on June 29, 2013;
- The Special Master shall engage the Town of Coventry Board of Canvassers to administer the election's voting process;
- The Special Master shall allow qualified voters to cast votes for Board members in an “all day referendum” style election, between the hours of 8 a.m. and 8 p.m. at a location that he is to determine at least 15 days prior to the election;
- Notice of the Special Meeting and election, must be published at least twice on Coventry Patch and the Providence Journal's website, as well as in the Kent County Times, and at each of the District's fire stations, with the Secretary of State, and on the Special Master's website.
Judge Stern ordered that the newly elected Board members will fill, in accordance with the Charter, the unexpired terms of the members that resigned. The candidate receiving the highest number of votes will be elected to the longest unexpired vacancy term. The candidate received the next highest number of votes will be elected to the next unfilled longest unexpired term available, and so forth until the entire Board is formed.
In regards to the powers that the new Board will have, Judge Stern pointed out that unlike a normal insolvency proceeding, the Court's role is not limited to rewarding the largest return to creditors, but rather to ensure that public safety and public policy implications are recognized, as the district is the primary provider of fire and emergency services for its 18,000 residents along with lighting responsibilities for 27 square miles of the Town. Because of this fact, Judge Stern said the Court is required to consider the unique circumstances involved and to implement a different, nontraditional approach.
"Although there is a consensus that there must be some form of fire and emergency medical services coverage available to the residents of Central Coventry, there is not a consensus regarding what form that should take," he said. "Therefore, this Court finds that the taxpayers of the CCFD, through their duly elected representatives, are in the best potion to decide the future of their fire district going forward."
Judge Stern went on to acknowledge the creditors still owed money by the fire district, saying "Is is critical for any fiduciary of the CCFD to recognize that the CCFD does not have a 'clean slate' - such as would exist with a newly created entity,". He discussed the option of allowing Special Master Land to formulate and present another budget at the upcoming annual meeting, but feels this would likely be an exercise in futility when considering that the last two budgets presented to taxpayers were rejected.
"As Albert Einstein stated: 'Insanity: doing the same thing over and over again and expecting different results.'," referenced Stern.
A second option, of which Judge Stern deemed appropriate, would shift the delegation of certain specific powers of the Special Master to the newly constituted Board while taking into account the Court's responsibility to ensure the district's assets are preserved and protected for the benefit of the creditors. At the same time, the appointment of power would allow CCFD taxpayers to have a large degree of control over their future.
Therefore, following the Special meeting and election on June 29, at the first meeting of the newly elected Board, the following powers and duties shall be delegated to the Board in accordance with the law and CCFD charter:
- Develop a short- and long-term plan for the future of the CCFD to be implemented on or before Sept. 1, 2013;
- Formulate a budget for the 2013/2014 fiscal year that includes a plan for the satisfaction of outstanding liabilities, including administrative expenses;
- Recommend a tax levy and tax rate to voters in order to sustain the budget approved by the Board;
- Notice and convene an annual meeting of the fire district prior to Sept. 1, 2013 and present the Board-approved budget to taxpayers for a vote;
- Have the authority to negotiate and/or renegotiate contracts and agreements with third parties, including, but not limited to, the government and quasi- governmental agencies, as well as secured and unsecured creditors for the 2013/2014 Fiscal Year and going forward;
- Have the authority to negotiate with the firefighters' union and shall constitute the bargaining agent of the CCFD for the 2013/2014 Fiscal Year and future years*;
- Formulate a contingency plan, together with evidence of the efficacy and viability of the plan, to provide for fire and emergency medical and lighting services to the fire district to be implemented should the CCFD be liquidated. The Board shall present the contingency plan to the Court for approval*;
- Provide the Court and Special Master with a written update every two weeks on its progress towards fulfilling its delegated authority;
- Cooperate with the Special Master and share information and resources to allow each to fulfill their respective delegated authority;
- If it deems appropriate and necessary, the Board may request of the Court authorization to expend estate funds in furtherance of its delegated authority;
- The Special Master will retain all other powers not expressly delegated to the Board. These powers include, but are not limited to, the management, operations and oversight of the CCFD during the 2012/2013 Fiscal Year.
*The Board shall have the power to bind the CCFD estate only with the prior approval of the Court. Nothing in this section shall be deemed to impair the rights, if any, of parties to existing contracts without their consent or further order of the Court.