Friends and The Reserve Fund

This page is focused on Guilford's Reserve Fund and how Selectboartd Chairman, Zon Eastes, and Friends of Algiers Principal Officer, Sheila Morse, misused this fund to cover expenses for a Bike Path and Pedestrian Feasibility Study that was being promoted by Representative Sara Coffey

The Reserve Fund

Shortly after selectboard Chairman, Zon Eastes, attempted to convince the residents of Guilford that their Elected Auditors are no longer responsible for investigating town finances including the Waterline Fund, one of the elected Auditors suddenly resigned. Zon then chose his former "freelance bookkeeper" as Guilford’s Appointed Auditor to fill the vacancy.

One of the funds that residents wanted a forensic audit on was the Reserve Fund, and here's why.

In 2013, Guilford voters authorized Article 6: "the establishment of a Reserve Fund in accordance with 24 V.S.A. § 2804(a)

The selectboard then created the Reserve Fund Policy to direct the use of those funds. Sheila Morse (Treasurer of the Friends) was the chairperson of the selectboard at this time.

The policy stated that: “The Selectboard will only use the reserve fund to alleviate unanticipated

short-term budgetary issues such as revenue shortfalls or unforeseen expenses.”

Guilford’s town report shows several established debts that were paid by accessing the Town’s Reserve Fund. However, none of those withdrawals were done at a duly warned public hearing.

There are several examples to choose from in the Town Report, but on page 21 it explains that over $7k was removed from the town’s reserve fund to pay for a Bike and Pedestrian Path Feasibility Study.

The study was promoted by State Representative Sara Coffey which, along with the Algiers Traffic Study, is explained further on the page Friends and Election Integrity.

The cost of the Bike Path Feasibility Study was neither Unanticipated nor Unforeseen and should not have qualified as an option for relief from the Reserve Fund.

Sheila Morse is the expert on Guilford’s Reserve Policy as its author. However, After drafting the policy as Chair of the Selectboard, Sheila resigned in the middle of her term. Zon was then appointed to fill Sheila’s seat and Richard Wizansky was appointed to the Chair.

Shortly after Sheila resigned, she was appointed by Wiz and Zon to Guilford’s First Finance Advisory Committee and has been the Chair of that Committee since its inception.

Instead of acting as Guilford's watchdog as the Selectboard’s appointed Finance Advisory Committee Chairwoman, Sheila and Chairman Eastes ignored the Reserve Policy almost entirely.

That policy read: “Any expenditure of the reserve fund by the Selectboard (…) shall require approval of a majority of Selectboard members after due notice and a public hearing.”

Instead of offering “Due Notice” and a “Public Hearing,” Sheila, acting now as the Town Administrator, (Peder Rude has a "grave health issue") worded a regular selectboard meeting agenda as “Report on Funds.”

Instead of giving a “Report on Funds,” Sheila read a motion to remove almost $100k from Guilford’s Reserve Fund which included the cost for the Bike Path study. Zon, acting as the chairman of the selectboard, then made the motion “as read by Sheila.”

Jason Herron contested the use of Guilford's Reserve fund this way and asked for an open discussion with the Selectboard, but was limited by Zon to the Community Comment period where the board was instructed not to engage with him.

Following that meeting Zon responded to Herron’s requests in an email stating:

Thank you for your comments about the Reserve Policy during Community Comments last night. I, for one, appreciated the even-handed, civil way you spoke.

I realize that your preferred mode might’ve been to have an open discussion with board, (…).

Erika and I will discuss the agenda for the next meeting, on March 25. (…)

(…). In preparation for your comments last night, I read the Reserve Policy very carefully and landed upon the same first two points you did. (Also your third point, but for different reasons, see below.)

The language, read with today’s eyes (just ten years later), suggests the very recommendations you are making now.

In speaking with a signer to the policy, (SHEILA MORSE) however, it is not clear that this ‘today’ reading was intended then. (Words, meanings, intentions do indeed change over time.) (…).

To your third point. (…), there is a way to read the policy that might have allowed the use of Reserve funds for the Bike/Ped study. I need to do a bit more research before I attempt to explain this line of thinking to you. Stay tuned.

I agree with you that this policy, or any, should be written to express the clearest intention of the Selectboard. (…) (…) —Zon

The Selectboard then rewrote the Reserve Fund Policy.