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Author: Peter Barnes

Sacramento Going After Water Rights

Posted on by Peter Barnes

Some troubling news from Sacramento for Sheep Creek Water Company customers.  Three bills currently making the rounds in the legislature – AB 1337, AB 460, and SB 389, all are aimed at curtailing and/or giving the state more power over pre-1914 water rights.  The water rights that SCWC has up in the canyon are indeed pre-1914 water rights, which have been considered very, very strong.  So this move would give the state power to force Sheep Creek to ramp down production, most prominently during a time of water shortage, but theoretically at other times too.

On the one hand, at the moment the company is nowhere close to pulling it’s full 3000 acre-foot allowance from the canyon.  That has been the case for a while, ever since the state placed a compliance order and the moratorium on the company.  That said, this is clearly a move to continue to centralize power of water resources with the state.  California’s government does not have a good relationship with mutual water companies; they would definitely prefer if mutual water companies all went away.  These bills will go a long way to make that more possible, and possibly endanger Sheep Creek’s very existence in a few years.

California water rights at risk as three legislative proposals advance

https://calmatters.org/commentary/2023/06/water-rights-legislative-proposals-advance/?mc_cid=2bbd438cc3

Although advocates contend that the bills would merely give the water board much-needed managerial tools, a coalition of water districts and agricultural groups see them as a prelude to the wholesale abrogation of their water rights. The board could gain the “potential to strip public agencies of water rights that have been used to sustain communities for decades,” with decrees of “arbitrary outcomes,” they wrote in an opposition letter.

All three measures, Assembly Bill 1337, Assembly Bill 460 and Senate Bill 389, survived initial floor votes but the political battle is just beginning. Their fate could rest in Gov. Gavin Newsom’s hands as powerful interests clash over a bedrock issue – who prevails when there’s not enough water to meet all demands.

(h/t Cheryl Rhoden for this news)

5/16 Board Meeting Recap

Posted on by Peter Barnes

Three biggest takeaways from the meeting last night, none of which were actually on the agenda:

  1.  The company is attempting a new well at Cambria/Mescalero Rd.  As of last night, the rig has drilled down to 320′.
  2.  The board will no longer use Zoom for remote participation.  There will be no remote participation.  In person or not at all, from now on, at board meetings.  This does mean they are unable to turn anyone away from the meeting as long as 24 hours written notice of intent to attend the meeting is provided in advance. The board discussed meeting in the garage from now on (not kidding).
  3.  30% of the water pulled from the wells/tunnel in April disappeared.  For the year, that means just over 25% of the water has been wasted (10% is the accepted industry standard).  That’s quite a bit of money down the drain.  The GM said it might be due to faulty meters, and that’s why the company is working on upgrading meters.  They replaced 3 meters in April and 2 in March, and with 1,200 current meters in use, obviously this is a problem that won’t be fixed anytime soon.  If this is a meter issue and not a leak the company doesn’t know about, then some customers are getting lots and lots of free water at the moment.   If that’s you, enjoy it!

Other items that were on the agenda:

  1.  A customer with one share had a water leak in March, and received a $2000+ water bill in April that he can’t pay.  He petitioned the board for relief on the large bill, and was denied.
  2. A great deal of time was spent discussing the share buyback plan – with the board secretary tasked with writing up the details of the plan.  This one is a little weird.  What exactly did the shareholders vote on if the company is going to go making changes to the plan proposed at the annual meeting?
  3. Sheep Creek is finishing their well rehabs with Well 8, which is fine and all if a little confusing since there haven’t been issues with this well.  It does seem like the company has more money than it knows what to do with thanks to Tier 3, so the board is trying to figure out how to spend it.
  4. Dave Nilsen is going to train the board on how to use Robert’s Rules of Order.

Finally, the company lawyer was in attendance, which is highly unusual.  There was nothing on the agenda for him, so it’s a mystery why he was there.  An expensive mystery, obviously, but the company clearly has money to burn.  The lawyer only spoke once, making a suggestion about the share buyback plan.

Annual Meeting Summary

Posted on by Peter Barnes

First with the results. All five of the current board members were elected for another term, and the Share BuyBack program was voted in. There were around 4400 total shares voted.

The board opened the meeting by cancelling public comment and then only allowing the public to make comments after the presentation on the share buyback program. Games games games.

Andy Zody ran through the financial and system upates quickly, along with a recap of the failed consolidation. Other than missing a detail here and there, like forgetting that there were two rate increases over the past year, one in June of last year and one in February of this year, this was mainly boilerplate.

There was some discussion of the share buyback program. It seems most people found it confusing, and there were lots of questions trying to figure out the details. The board, mainly Dave Nilsen, spent a bit of time explaining some of the details. Special focus was placed on pointing out that if no other shares are for sale when someone wants to buy shares, the company will sell shares to the public for less than $3,250. Instead, the board would look at recent sales as a guideline and then list those shares for “fair market value”. Considering there are several hundred shares on the board currenty for sale by the Nilsen family and a few others, this seems rather pointless at the moment. The biggest issue I see (outside of potential corruption issues) is that the company would then not be making as much money out of this program as intended, when it’s already not going to make very much money and take a while to bring a return on the money spent.

One public comment in particular stood out: Kathleen Zimmerman said she was surprised with all the people talking about fixing Tier 3 without mentioning loaning of shares. She said she has many shares loaned out, and is willing to loan more shares to people who are struggling with Tier 3 costs right now. Feel free to drop me a line at peter.barnes@sheepcreekwater.org if you are interested in borrowing some shares.

After this there were nominations for the board and then the candidates spoke. There were no suprises, 8 nominees for the 5 positions. Highlights included Brek Randolph recommending that people start looking into collecting rain water if the cost of water service keeps going up, and Kellie Willias mentioning that the board is looking to upgrade the company’s billing system to software that will allow for online bill payment.

My personal take: This was a decent first showing. The board has a significant home field advantage in setting (and changing) the agenda, and is able to vote all company proxies for themselves as well. That said, Deborah, Brek, and myself were able to receive a few more votes than previous opposition candidates during recent years.

Final Tallies:

Board of Directors
1. Luanne Uhl: 3883
2. Andy Zody: 3801
3. Eric York: 3344
4. Kellie Williams: 3322
5. David Nilsen: 3281
6. Peter Barnes: 1123
7. Brek Randolph: 1087
8. Deborah Philips: 1026

Share Buy-Back Plan
Yes: 3767
No: 612

Why Attend the Annual Meeting?

Posted on by Peter Barnes

I don’t know about you, but I love the fact that Sheep Creek Water Company is a small mutual water company.  There are only 8000 shares in total, and they all have a vote on what is happening with the company.  This is one of the best practical applications of democracy in action:  we as shareholders have the most significant voice in deciding what happens with our water company, and therefore our community.

This year in particular is an important turning point for the company.  A year ago, consolidation with PPHCSD was seemingly in the final stages of completion.  Now things have changed dramatically.  We have one and a half years left to meet the demands of the state’s compliance order from 2018.   We are also going to have to figure out how to pay for some badly needed infrastructure upgrades over the next decade or so.  We also have to decide whether or not to let the board start buying back some of the company’s stock.

There is also an election for the Board of Directors.  I strongly believe it is time for new leadership on the Board of Directors.  It’s time to replace the people whose leadership has brought compliance orders from the state, failed attempts at consolidation, and no vision for the future of this water company and community.  That is why I am running for the Board this year, along with Debra Philips and Brek Randolph.  It’s time for positive change in our community.

No matter how you decide to vote, it’s important that your voice be heard and your vote counted!  I hope to see you at the annual meeting tomorrow!  10AM at Pinon Mesa Middle School.

Brek, Deborah and myself have come up with 5 Agreements that form the basis of our platform for change.  Here they are:

California Wet, Sheep Creek Water Company Still Dry

Posted on by Peter Barnes

Congratulations to everyone in California who isn’t a Sheep Creek Water Company customer.  The state has announced that 100% of all requested allocations from the State Water Project and Central Valley Water Project are 100% filled for water customers in California.  This wet winter has sure had some lovely surprises between the spring blooms and now full water allocations.

Unless you are a Sheep Creek Water Company water customer, of course.  We are still stuck in what is termed in the bylaws (p. 31) “a severe water supply decrease” and so our water allotment per share remains ridiculously small.  And the moratorium drags on and on…

A wet California boosts water allocations to 100% for first time in nearly 20 years

https://www.latimes.com/california/story/2023-04-20/california-boosts-water-allocations-after-wet-winter-full-reservoirs

For the first time since 2006, California officials have increased allocations from the vital State Water Project to 100% of requested supplies, as reservoirs across the state are nearing capacity and an epic snowpack has yet to melt.

An unusually wet winter brought unprecedented snowfall and a succession of heavy rainstorms, pulling much of the state out of a punishing years-long drought and transforming the year’s water outlook.

…

“With reservoirs nearing capacity and snowmelt runoff starting to occur, [the state Department of Water Resources] now expects to deliver 100% of requested water supplies, up from 75% announced in March,” state officials said Thursday.

Also on Thursday, the U.S. Bureau of Reclamation announced a corresponding increase to 100% of requested water allocations for most regions served by the federal Central Valley Project, which provides critical farming irrigation and water supplies to the San Joaquin Valley, San Francisco Bay Area and Central Valley.

 

 

El Niño update

Posted on by Peter Barnes

I keep track of things Daniel Swain writes about weather, his latest discussion of California weather included a tidbit about a potential “super El Nino” in the next couple of years. I don’t make predictions about the weather, but this could have a positive impact on refilling the source of Sheep Creek’s water supply for a few years.

https://weatherwest.com/archives/25610

 

El Niño update: it’s coming.

Current SST anomaly map from NOAA. It depicts a remarkably warm global ocean, punctuated by extremely warm temperatures near the tropical west coast of South America and unusually cool water near California and the west coast of North America.

At this moment in time, no person alive has ever experienced global ocean temperatures as warm as they are today (i.e., the global average SST anomaly has reached record levels in recent days). This is despite remarkably cool patches of water in two regions: the sub-Antarctic eastern Pacific west of South America, and the mid-latitude East Pacific along the coast of western North America (including along the California coast). Nearly everywhere else on Earth, the oceans are presently much warmer than the long-term average–and this is especially true near the west coast of tropical South America near Peru, where SST anomalies are locally in excess of 5C (9F). That is an extraordinary level of oceanic warmth, and is highly suggestive of the early stages of a significant El Niño event.

And indeed: all other indicators also point to a rapidly-developing El Niño in the tropical Pacific. Westerly wind bursts are underway; subsurface warm water is sloshing eastward; and both dynamical models and statistical predictions suggest a very high likelihood of transitioning into El Niño conditions by this summer or autumn at the latest. In fact, dynamical model predictions continue to become more and more aggressive regarding the potential magnitude of the coming El Niño event–with some indicating at least some possibility of a “super El Niño” by next autumn (i.e., one comparable to or greater than the top-tier events that occurred in 82-83, 97-98, and 15-16).

Despite much hype at the moment, it’s important to remember that we do remain on the “wrong side” of the “Spring Predictability Barrier” (during which models sometimes struggle to produce reasonable predictions of what might happen in the coming months). I normally wouldn’t put too much stock into explicit ENSO intensity predictions at this early juncture. However, in this case, there are plenty of ocean-atmospheric dynamical theories that would suggest that the path toward a significant El Niño event is indeed plausible this year–especially all the energy stored in the tropical Pacific Ocean during the remarkable “Triple Dip” (three year long) La Niña event that just ended. So for now, it remains a waiting game…but I do think it’s increasingly likely this will be a major player in California weather starting later this summer and into next autumn/winter. Stay tuned.

Aqueduct Problems

Posted on by Peter Barnes

Sheep Creek Water Company is fortunate not to need water from the aqueduct. There have been times in the past when the company thought about purchasing aqueduct water, when water supply was really low. Even though the aqueduct runs right through the northern part of Phelan, we don’t use the water, but communities around us definitely do from time-to-time, especially down the hill.

This article is also of note, because the record-breaking amount of snow in the mountains is sure to cause other infrastructure problems. Hopefully it means the Sheep Creek tunnel really starts running at maximum capacity as the melt water seeps through the ground, but there could be issues this year with flooding, mudslides, and other such phenomena as the snow melts.  That said, this is an old company with old infrastructure, just like the aqueduct.  Something to keep an eye on for sure.

‘We’ve lost the aqueduct’: How severe flooding threatens a Los Angeles water lifeline

https://www.latimes.com/environment/story/2023-03-25/eastern-sierra-flooding-threatens-los-angeles-water-lifeline

(alternative link): https://archive.is/G5VdJ

“We’ve lost the aqueduct!” a Los Angeles Department of Water and Power inspector told his superiors by cellphone. As he spoke, chocolate-colored runoff and debris undercut the aqueduct just west of Highway 395 and the community of Olancha.

It was the first time in history that the 200-mile aqueduct had been breached by extreme weather, threatening water deliveries to 4 million ratepayers in Los Angeles.

It was also an indication of just how difficult it would be to defend the waterway against torrential runoff from a winter of near record snowpack. For weeks, DWP crews had been using heavy equipment and other means to control the anticipated spring runoff, but even longtime aqueduct workers were shocked by the suddenness of the break.

…

The DWP’s system is starting to show signs of age. In recent years, several stretches of the aqueduct system have been drained to allow replacement of cracked and bulging sections of century-old concrete.

Since severe storms began lashing the eastern Sierra region in January, the DWP has been relying on tactical strategies developed during epic rainfall that ended a five-year drought in 2017.

DWP crews are racing to clean out clogged culverts, divert excessive runoff into pasturelands and sage plains, and build berms to steer flood water from small towns straddling U.S. Highway 395 including Olancha, Cartago, Lone Pine, Big Pine and Bishop.azing at snow-clad Sierra peaks to the west, Perez said, “If all that snow comes down hot and heavy when the weather warms up, the challenge will be to protect Owens Valley’s communities from flooding.”

Freedom of Speech and SheepCreekWater.Org

Posted on by Peter Barnes

In light of Mr. Andy Zody, the president of the Board of Directors of Sheep Creek Water Company making mention of discussions with the company lawyer about this website, I thought it would be a good idea to post some legal background on why this website and domain name are legal and valid.  As much as the company might wish otherwise, what I am doing here is perfectly legitimate, and this has been backed up quite thoroughly by judges in court.  If the company does decide to take this issue to court, it would waste even more shareholder money than has already been wasted discussing this matter with the company lawyer.

Dot Sucks: A Battle Between Trademark Rights and Free Speech

…The federal Ninth Circuit in Bosley Medical Institute, Inc. v. Kremer, held that it was not a trademark infringement for a former customer of Bosley to register the domain name Bosleymedical.com and use it to operate a website critical of Bosley. The court reasoned that Kremer’s website was a non-commercial use of the trademark, thus it was not infringement under the applicable federal law. The Court noted that Kremer earned no revenue from the website, no goods or services were sold on the website, and there were no links to any of Bosley’s competitors’ websites. The Ninth Circuit states, “As a matter of First Amendment law, commercial speech may be regulated in ways that would be impermissible if the same regulation were applied to noncommercial expressions.” However, the Bosley Court also held “An infringement lawsuit by a trademark owner over a defendant’s unauthorized use of the mark as his domain name does not necessarily impair the defendant’s free speech rights.”

While the Bosley case was resolved between the parties before there was final court determination on the cybersquatting claim, other courts determined that bad faith was lacking where a domain name matching a trademark was being used to complain about the trademark owner’s products or services.

In the Sixth Circuit, a consumer prevailed against a landscaping company when she registered its trademark as a domain name and used the website to express her displeasure with the landscape services. Lucas Nursery & Landscaping, Inc. v. Grosse, 359 F.3d 806, 807-08 (6th Cir. 2004)

In the Fifth Circuit, a home builder was unable to convince a court that its disgruntled customer acted in bad faith when he registered its trademark as a domain name after being unhappy with the home he purchased. The website contained the homeowner’s story of his dispute with the builder, along with a disclaimer at the top of the home page indicating that it was not the home builder’s website TMI, Inc. v. Maxwell, 368 F.3d 433, 435 (5th Cir. 2004).

As both the Fifth and Sixth Circuit Courts point out, the disgruntled customer who opens a “gripe site” under the domain name of a business that is complained about is not a “cybersquatter” and is not violating acting in bad faith. This is a valid exercise of free speech rights, and not the type of harm that the cyberpiracy laws were designed to protect. Cleary Bldg. Corp. v. David A. Dame, Inc., 674 F. Supp. 2d 1257, 1265 (D. Colo. 2009)

As noted by the Second Circuit Courts, “[d]omain names ․ per se are neither automatically entitled to nor excluded from the protections of the First Amendment, and the appropriate inquiry is one that fully addresses particular circumstances presented with respect to each domain name.” Name.Space, Inc. v. Network Solutions, Inc., 202 F.3d 573, 585 (2d Cir.2000).

Dot Sucks: A Battle Between Trademark Rights and Free Speech

Everyone’s Worried About Water

Posted on by Peter Barnes

Sheep Creek shareholders are like most of the world.  For a long time, the water flowed here, and it seemed unlimited.  Now that problems have started to crop up, we have to do more to take care of this precious resource that has been such a crucial factor in making Phelan the place it is today.

Two-Hour Lines, Packed Rooms Show Urgency at UN Water Meeting

https://www.bloomberg.com/news/articles/2023-03-23/un-meeting-highlights-lack-of-safe-drinking-water-for-2-billion

The United Nations marked World Water Day on Wednesdayby hosting its first water conference since 1977, and there was clearly pent-up appetite to discuss Earth’s most life-giving element.

The high interest seemed to have caught the international organization off guard. Attendees waited in line for more than two hours to pick up pre-approved passes and crowds packed into too-small rooms for panels

…

The problem, de Albuquerque theorizes, is that water is such a basic part of life it tends to be forgotten by those who have access to it. “Water is so obvious,” she said, “that it is hidden.”

Recap of 3/23/23 Board Meeting

Posted on by Peter Barnes

The Sheep Creek Water Company board of directors met again tonight, with the focus on getting things prepared for the upcoming Annual Shareholder Meeting.  Quite honestly, the board is very, very late in wrapping up the details for the meeting, and after tonight, those details are *still* not complete.  Where is the annual meeting being held?  Don’t know the answer to that, their excuse is that this week is spring break for the schools, although classified staff are still working.  Also, the proxy form isn’t ready to go, because even though it’s the same form they use every year, approved every year by the same lawyer who has worked for the company for quite a long time, it needs to go to the lawyer for final approval, and won’t be ready until sometime next week, hopefully March 29.

Speaking of the company’s lawyer, Board President Andy Zody managed to complain about how expensive it is talking to the company lawyer, so they weren’t able to discuss the proxy form in depth.  He was, however, talking to the lawyer about this very website, I assume to see what legal grounds they have to shut this site down.  What a fun way to spend shareholder money talking to an expensive lawyer!

Most of the meeting was spent coming up with the details of the board’s agenda for the annual meeting, specifically their excuses for why they haven’t drilled any wells yet so the Sheep Creek Water Company can escape the current moratorium, as well as how the company using Tier 3 money to buy shares from shareholders will raise the price of shares.  I really wish I had something positive to say about the board right now, but quite honestly it is very difficult.  They are simply not doing their job well.

I am keeping my eyes open for the board attempting to cancel or postpone the upcoming meeting, since there is a concerted effort by myself and others to have new members voted onto the Board of Directors.  Considering how little they think of company shareholders, it would not be surprising.