Post by Admin on Oct 21, 2019 19:44:09 GMT -7
Clean Water Act Violations - GLA Faces Difficult Times
The Glastonbury Landowner's Association (GLA) violated federal law when it illegally excavated Golmeyer Creek in 2018. They received an official Notice of Violations Letter in December 2018 and were ordered to respond by January 2019. The GLA responded by blaming the Army Corps of Engineers for the violations and stating that they did not see a problem. So, what happens next and how will landowners be affected?
The Army Corps of Engineers will send a Demand Letter to the GLA. They will demand that Golmeyer Creek be restored to its pre-excavation condition. Fines, mitigation costs and even criminal charges may be included in the letter. The Corps will demand a certain amount of money from the GLA, that must be paid within a specific time period. The Corps will also note that if their demands are not met, they will go to court and ask for a judgement against the GLA.
Federal law allows for a maximum fine of $50,000.00 per day for Clean Water Act violations. So far, three hundred twenty days have elapsed since December 4th, 2018 and today, October 21st, 2019. Consequently, the maximum fine could approach sixteen million dollars. Criminal charges can be pursued if "willful intent" is suspected. The maximum criminal penalty is three years in federal prison. Montana State law shields GLA directors from being personally sued. It does not shield them from criminal charges or violations of federal law.
Landowners are shielded from liability for GLA Board actions per our Bylaws. Thus, landowners cannot be forced to pay for GLA Board noncompliance or criminal actions.
Once the GLA receives the Demand Letter they will face difficult decisions. If the GLA were required to pay just $500,000.00 for restoration, mitigation, fines and legal costs, they might consider:
1) The GLA has about $160,000.00 in the bank. Since all the 2020 assessments will not be paid until the end of the 3rd quarter in 2020, some of the funds in the bank will be needed to cover 2020 expenses. Traditionally, the GLA has operated in the black by not spending current assessment funds until the following year. They could eliminate their quarterly payment plan and require that all full year assessments be paid by January 31. That would free about $100,000.00. However, at least 51% of all assessment money, per the Covenants, must be spent on the roads. Therefore, only $49,000.00 would be available for violation expenses.
2) The GLA cannot legally borrow money, but it may be able to convince some landowners to sign for a $500,000.00 loan like they did with the paving of Dry Creek Road and the North Glastonbury loop in 2001. The entire community would have to vote because the loan's payments would be coming from assessments.
1) The GLA has about $160,000.00 in the bank. Since all the 2020 assessments will not be paid until the end of the 3rd quarter in 2020, some of the funds in the bank will be needed to cover 2020 expenses. Traditionally, the GLA has operated in the black by not spending current assessment funds until the following year. They could eliminate their quarterly payment plan and require that all full year assessments be paid by January 31. That would free about $100,000.00. However, at least 51% of all assessment money, per the Covenants, must be spent on the roads. Therefore, only $49,000.00 would be available for violation expenses.
2) The GLA cannot legally borrow money, but it may be able to convince some landowners to sign for a $500,000.00 loan like they did with the paving of Dry Creek Road and the North Glastonbury loop in 2001. The entire community would have to vote because the loan's payments would be coming from assessments.
3) The GLA could propose a one-time Special Assessment to collect $500,000.00. The total cost per parcel would be $1,250.00.
A private loan or a Special Assessment would be politically difficult to sell to the community. Who wants to personally pay for the mistakes Walter Wunsch, Dennis Riley and the GLA Board made? The Bylaws protect all landowners from liability for Board actions. The Clean Water Act violations are the legal responsibility of the Board; not the landowners they serve.
4) The GLA could seek relief through the courts by holding Walter Wunsch responsible for his actions. Wunsch signed the initial 310 permit and promised to abide by it. The Corps found him in violation and is holding both him and the GLA Board responsible. At an August 23rd, 2018 Road Committee meeting Wunsch characterized his work on Golmeyer Creek as "an innocent mistake". Then he promised that he and his wife Regina would cover all costs.
5) The GLA Board by a simple majority vote, may choose to dissolve the GLA corporation in an effort to evade paying the full amount of the Clean Water Act violations. That action would be hotly contested with the debate forming along old timer and newcomer lines. Old timers cannot imagine a world without the GLA and the "spiritual dome" that covers Glastonbury. The dome would be shattered if the GLA dissolved.
What happens if the GLA does not pay the Army Corps of Engineer's hypothetical amount for $500,000.00 for violations of the Clean Water Act? The Corps would then be forced to go to federal court and ask for a judgement against the GLA, and possibly Walter Wunsch and Dennis Riley. If the Corps were granted a judgement, they could immediately begin to empty bank accounts. Road maintenance and snowplowing would come to a grinding halt. Past due collections would cease. The attorneys, accountants, administrative assistant and other service providers could no longer be paid. Credit would dry up. The GLA would then be forced to prepay all expenses. They could still collect and deposit landowner assessment checks. Even so, the Army Corps of Engineers could also go back to federal court and get another judgement. That judicial process could continue until the $500,000.00 plus interest was paid in full.
The Corps may foreclose on GLA assets, like Common Lands. The Corps may also go after the personal fortunes of Walter Wunsch and Dennis Riley, since they both signed the initial 310 permit.
What happens if the GLA does not pay the Army Corps of Engineer's hypothetical amount for $500,000.00 for violations of the Clean Water Act? The Corps would then be forced to go to federal court and ask for a judgement against the GLA, and possibly Walter Wunsch and Dennis Riley. If the Corps were granted a judgement, they could immediately begin to empty bank accounts. Road maintenance and snowplowing would come to a grinding halt. Past due collections would cease. The attorneys, accountants, administrative assistant and other service providers could no longer be paid. Credit would dry up. The GLA would then be forced to prepay all expenses. They could still collect and deposit landowner assessment checks. Even so, the Army Corps of Engineers could also go back to federal court and get another judgement. That judicial process could continue until the $500,000.00 plus interest was paid in full.
The Corps may foreclose on GLA assets, like Common Lands. The Corps may also go after the personal fortunes of Walter Wunsch and Dennis Riley, since they both signed the initial 310 permit.
It is also possible that the Corps will ask for a smaller amount to restore Golmeyer Creek and solve the list of violations. Alternatively, they could work out a time payment plan. Once the Forum knows the facts, we will publish them. Our hypothetical example is provided so that landowners can better understand their own options, while the GLA Board deals with its violations of the Clean Water Act.
We have reached out to the GLA Board for information regarding communications with the Army Corps of Engineers. If they respond we will post their reply.