The Coventry Selectboard voted to cut off funding for the Coventry Town Foundation next month after questions arose over the legality of the nonprofit’s financial mechanism.
The problem arises from a decision 17 years ago, when the foundation was created, to divert 10% of the fees the town receives from Casella Waste for its landfill in Coventry to the nonprofit’s coffers.
That violates a Vermont statute requiring annual voter approval of any appropriated money, Town Attorney Brian Monaghan said at the June 3 Selectboard meeting.
“Our current voters had no say in that amount,” Town Administrator Amanda Carlson told VTDigger, explaining that both Monaghan and an attorney from the Vermont League of Cities and Towns had reached the same conclusion.
Casella sends tipping fee funds to Coventry to pay the town for housing its landfill. Per the agreement, 90% of that money goes to the town, and the remainder goes to the foundation, Carlson said. Coventry received more than $1,147,500 in fees from the landfill for fiscal year 2018, according to municipal records, and as of Dec. 31, 2018, it had received about $524,760 in the current fiscal year.
Dale Perron, president of the foundation’s board, told VTDigger that the portion of the town’s Casella fees diverted to his organization makes up the group’s total budget.
The foundation’s page on the Coventry town website says its goal is “to enrich our community through support of educational, community assistance, emergency disaster relief, historic preservation, and other community based services.”
It’s a separate entity from the town, but the funds the group receives from Casella are controlled by the Selectboard, since those are built into the contract between the town and the waste company, Carlson said.
Selectboard members amended the town’s contract at the June 3 meeting to end the 10% diversion effective July 1, allowing the foundation to receive its last quarterly appropriation.
“They have to do their job,” Perron said.
“We’re just trying to figure out our best way of getting through this next year,” he said.
Members of the foundation’s board asked officials to schedule a special town meeting to allow residents to vote on a $160,000 appropriation for the coming fiscal year. Perron told Selectboard members that figure would cover the organization’s 2020 budget, but did not provide a breakdown of what that money would be used for, according to town minutes.
Selectboard members denied the request.
Carlson said there had been questions about the organization, its setup and its finances. At the June 3 meeting, former Selectboard member Scott Morley listed several concerns, including “possible conflicts in school funding” and “conflicts of interest for board members,” according to the meeting minutes.
In response, Perron said Morley was making unfounded accusations, the minutes show.
The foundation plans to ask voters for funding approval on Town Meeting Day next year, according to its May 21 meeting minutes. If the budget is approved, the funds would come through next October, according to the minutes.
The foundation’s board hasn’t had a chance to thoroughly review its options, Perron said, but it could look to draw money from the group’s endowment, which is meant to keep the organization afloat if the landfill closes.
Perron said the foundation probably will seek its own legal opinion on the legitimacy of its funding mechanism, “just to make sure (our attorney’s) legal opinion is the same as theirs.”
Selectboard Chair Mike Marcotte said at the June 3 meeting that he appreciates what the foundation does. Fellow Selectboard members Scott Briere and David Gallup agreed, saying they wanted to support its work.
Carlson emphasized that she doesn’t think the foundation had acted maliciously.
“It’s just a matter of staying legal, in the end,” she said. “We’re not trying to pull the money away from them.”
