Category: Sheep Creek News

RESPONSE TO REQUEST FOR EARLY RELEASE OF COMPLIANCE ORDER

First of all, I would like to give you my credentials to make comments on this post. Growing up my father owned a Water Well Drilling Company in San Bernardino. When I was old enough to around a drilling rig I spent my weekend and summer vacation working around the drilling site cleaning tools, greasing bearings, tightening packing, and learning how to use oxygen/acetylene torches, and welding machines. and helping out where needed. When I got out of the service I went back to work as a driller with my rig while going to college at night. After my time drilling wells I went to work for a large municipal water company as a Water Systems Operator. After finishing college I left the water industry and became a software engineer. So I have firsthand knowledge of the operations of the maintenance water wells, pumps, and a working understanding of hydraulics.

You may ask how it is that I have possession of these documents. All documents that the State Water Resources Board has on file or issues out are public records and all you have to do is file a written request for the information to receive a copy of them. They are not private or Water Company propriety files. You may also ask why I wanted to see this. I always thought, from my experience, that there was something just not right about this whole Source Capacity issue.

I have been doing some analysis of the Source Compliance order and there is one thing that sticks out after reading the water company’s latest request to the State. If the three wells (#3A, #4A, and #8) had undergone rehab before the State issued the Complaint the water company would have been 451 GPM (649,440 Gals per Day) over what the State required. In the request letter to the State, the water company stated that the lower production of these three wells was caused by a mechanical problem, when in fact it was a maintenance issue caused by a calcium and Magnesium Carbonate build-up in the well casings (see page 5 of this document). They are also blaming the State’s 2018 mandate to reduce water consumption by 25%, which is equal to the total system capacity increase after the wells were rehabbed, so this whole Compliance issue was caused by the haphazard manner under which the Water Company is being managed. Every penny that the customers have had to pay because of this incompetence could have been avoided by following normal well maintenance.

A second thing I would like to address is Sheep Creek’s current Tier allotments. The company by-laws state that all shares are entitled to 1/8000 of the company’s water production and that can legally only be changed by changing the by-laws, which was not done.

I will grant you that the Source Capacity Request prolonged drought that California has been in has affected the total water production but the biggest issue is the lack of proper management of the wells. We all know that Sheep Creek’s water is high in Hardness and has 1000 MCL of dissolved solids, 300 MCL of Iron, 500 MCL of Chloride, 500 MCL of Sulfate, all of which cause the buildup of sediments in pipes. The bottom line is that the current Source Capacity Deficiency is entirely a man-made issue. Read the entire document and make your own determination as to why the Water Company was non-compliant in it Source Capacity.

The Sheep Creek Water Company Board of Directors meeting on October 19 was relatively short.  The main news item from the meeting regarded some preliminary discussion about the 2024 budget.  There was no news regarding the committee planning Sheep Creek’s appeal to the State Water Resource Control Board regarding an extension on the compliance order, because the committee did not meet.

One interesting question that was answered at the meeting – so far this year, Sheep Creek Water Company has not purchased any shares through the Share Buyback program.  They were budgeting $55,000 for 2023 to purchase 55 shares, but that hasn’t happened as of yet.  Personally, I don’t think any company money should be going to this program, so I consider this a good thing.

The new well is not yet complete.  They are still test-pumping.  Supposedly the more they test, the higher the flow rate they are finding.  Hopefully this means they are opening the aquifer and water is reliably flowing into the well.  That said, with this being such a deep well, it will be very expensive to pump water, and this well will probably only be used as a backup in extreme water shortages.

The board approved two new meters.  They also allowed a family with a water leak during their vacation to have their overage chared at Tier 2 rates rather than Tier 3 because of the leak.

As mentioned earlier, the main news at the meeting was the budget for next year.  Well 13 loan payments are going to cost $160,000 per year.  They also announced new rates – Tier 1 will be $0.65 per hcf, Tier 2 will be $5.27 per hcf, and Tier 3 will be $11 per hcf, and they are raising the monthly service charge to $70 per month until July when Well 11 is paid off and the monthly rate will go back down to $65 per month.  They are also budgeting $80,000 for legal fees in 2024.  They are also planning on increasing meter costs by 15%.

My only comment on the budget is that there are still no discussions about how the company is working to keep costs down while they increase rates for customers.  There has been much discussion nationally about what has caused rampant inflation, with accusations of “greedflation” from companies increasing customer costs just because they can.  From where I sit, that’s exactly what’s happening with Sheep Creek Water Company, and it’s sad to see.

 

This was a strange meeting. The Board of Directors pushed their lack of transparency with shareholders farther than ever before. They refuse to answer any questions asked during the meeting, and the only information given out was from Dave Nilsen or his daughter Kelli Williams. After the chaos of the August meeting, now we are getting a first-hand look at the family who runs this company. A reversion to form, if you will, since everyone knows that Mr. Nilsen runs Sheep Creek Water Company, regardless of who has the title of “president” or “vice-president” etc. Still, very weird. The GM didn’t even give the system update, that honor went to Mrs. Williams, who simply read the update included in the agenda out loud.

Mr. Nilsen had a few things to say in the meeting. Towards the end of the meeting, he talked about company goals, and dropped an interesting tidbit. One of his goals is to bring a plan to equalize the allotment for shares to the annual meeting. What an interesting admission, considering there has been discussion on the Sheep Creek Shareholders Forum on Facebook about the current allotment being illegal, with lawsuits being filed against the company and a class action lawsuit discussed, specifically about the current inequitable treatment of shares.

The timing of this allotment change seems all wrong, unless the Board is quietly admitting they have a legal problem on their hands. The Board of Directors, especially Mr. Nilsen, have repeatedly stated their plan to pay for additional wells using Tier 3 money. Giving every share the same water allotment out of Tier 1 would seriously hamstring their Tier 3 funds. There would still be Tier 3 money coming in, but not nearly as much. The one problem with this, of course, is that the people most impacted by this change would be the customers with only one share. They would bear the brunt of the Tier 3 charges moving forward.

Mr. Nilsen’s other comments were about the illegal closed session discussion the previous month. Mr. Nilsen is chairing a committee, and he will select the people who will be on this committee. Much like the current “Roberts Rules of Order” committee, which is made up entirely of Nilsen extended family members. This committee will be discussing Sheep Creek Water Company’s attempts to get the compliance order from the State Water Resource Control Board lifted. The deadline for complying with the order is December 1, so time is of the essence on this one.

Some of the details Mr. Nilsen brought up about this committee were very interesting: committee members will be paid $200 per meeting, and the company is setting up a $50,000 fund to pay their lawyer to review and strengthen their arguments for the SWRCB. All of this money will of course come out of Tier 3, which continues to be the Board’s slush fund for all sorts of goodies. California may not have bought the Nilsen family shares last year, but they’ve come up with all sorts of ways to get money out of the company since then, with the Share Buyback Program, quietly raising the Board stipend from $200 to $600 per month, and now the SWRCB forgiveness committee.

The fact this committee has to happen in the first place makes it clear the company won’t actually be in compliance by December 1. Personally, I think it is very dangerous for Sheep Creek to rely on goodwill from the state that refused to buy our shares last summer because they don’t “buy failed water companies”, especially when it is known that California in general isn’t a fan of mutual water companies. We won’t have long to wait for an answer, though, since December is right around the corner.

The other main item of interest from the meeting is the Board answered my previous question about the collateral for the loans for the wells they are drilling. Kelli Williams said the bank providing the loan has liens against all properties of Sheep Creek Water Company. They refused to elaborate on what this means, but this information alone is pretty scary. If the SWRCB finds Sheep Creek to be out of compliance, they can fine the company up to $10,000 per day.  Wouldn’t take long for this to become a problem, and with all properties having liens on them the Board could quickly be backed into a financial corner.

One final note: Kelli Williams discussed having high school students from Victorville work on a water bill calculator for the Sheep Creek website. Hard to say whether or not this is a good idea or if it will work, but just the fact this is under discussion shows how arcane and bizarre the Sheep Creek billing system is. Our usage isn’t even broken out by tier on the monthly bill, and neither are the charges. Instead of making the billing system better, they’re going to put a calculator on the website. Weird.

In 2018 Sheep Creek Water Company finished Well #11, which is located north of Phelan Rd. and east of Johnson Rd.  Because this well is located outside of where we have water rights, Sheep Creek is required to pay the Mojave Water Agency (MWA) for any water it pumps.  In 2018, the MWA fee was $635 per acre foot, which translates to approximately $1.46 per hundred cubic foot of water (hcf).  This well is where the monthly Tier 2 allocation per share comes from – the cost of Tier 2 is higher than Tier 1, and includes the MWA fee, as well as extra costs for electricity and well maintenance.

Because Sheep Creek Water Company is required to produce water at cost to shareholders, as a not-for-profit mutual water company, the rates that went into effect in September of 2018 showed all the assocated costs for Tier 2.  Those rates were as follows:  $0.75 per hcf for well maintenance, $1.25 per hcf for electricity, and $1.46 per hcf for MWA fees.  The overall rate for water from Well #11 was $3.46 per hcf.  In January of 2023 the Tier 2 rate was raised to $4.50 per hcf, but without the cost breakdown available in 2018.

Sheep Creek Water Company publishes monthly production and usage reports that are part of the agenda for Board of Director meetings.  In these reports they list the amount of MWA fees collected, and the overall well maintenance fees collected (that includes $0.25 per hcf for the Wrightwood well field and the tunnel).  These reports also show how much water is produced from Well #11 every month.  I have broken out the production and usage reports, and they can be downloaded here:  Tier 2 Production and Charges.

A ltitle deep reading of the usage and production shows that every year Tier 2 usage is higher than Well #11 production.  The Tier 2 water that doesn’t come from Well #11 is drawn from the Wrightwood well field, where it’s cheaper to produce and Sheep Creek doesn’t have to pay MWA fees.  In 2019, 52% of Tier 2 water came from Wrightwood, in 2020 70%, in 2021 52%, in 2022 41%, and so far in 2023 99% of Tier 2 water has come from the Wrightwood well field.

Despite drawing water from the significantly cheaper wells in Wrightwood ($0.55 per hcf instead of $4.50 per hcf), Sheep Creek Water Company continues to charge full price for Tier 2 water.  Over the past 5 years, Sheep Creek customers have paid a combined $212,532.28 in MWA fees for Tier 2 usage, but Sheep Creek has owed the MWA only $84,372.45 for water produced from Well #11.  Those numbers don’t include the extra charges for electricity and well maintenance built into Tier 2 but not required for Tier 1 production.  The issue is most egregious this year, where virtually all Tier 2 water has come from the Wrightwood wells and the tunnel.  So far in 2023, Sheep Creek owes the MWA $361.95 but has collected $32,923.26 in MWA fees.

It is difficult to reconcile these numbers with Sheep Creek Water Company’s requirement to produce water “at cost”.  If the water is being pulled from the Wrightwood well field and the tunnel, customers should be refunded the excess Tier 2 costs over and above the cost of turning on Well #11 every other month or so to keep it ready to pump.

Under the California Public Utilities Code Section 2705, mutual water companies that provide water at cost are not regulated by the California Public Utilities Commission.  If Sheep Creek Water Company is not providing this water “at cost” they could be in danger of violating this section, and fall under regulation of the CPUC.

The Final Consolidation Report from the aborted consolidation between Sheep Creek Water Company and Phelan/Pinon Hills Community Service District posted on Sheep Creek’s website is missing much of the supporting documentation in the appendices.  Plenty of good information there, but lots of it is missing as well.

Through the Freedom of Information Act, I submitted a request for the complete report with all appendices, and have received the full document.  I will be posting the full report for anyone interested in the details.  I wil also be separately posting and commenting on some of the more interesting sections in the full report over time.  In all honesty, the main reason I submitted the FOIA request was because I wanted to see the legal analysis of Sheep Creek Water Company’s water rights for 3000 acre feet from Sheep Creek in the canyon below Wrightwood.

Here is the analysis of Sheep Creek Water Company’s water rights, written by the law firm PARIS KINCAID WASIEWSKI, LLP.

The entire document is only 7 pages, and it’s a good read for shareholders interested in our company’s historical and current water rights.  Below are a few items I find interesting in this document:

1.  According to this legal analysis, Sheep Creek Water Company’s water rights are not the stronger pre-1913 water rights.  Despite the company being formed in ~1912, the water rights application and approval came later, in 1917 and 1918, respectively (from page 2): “On June 12, 1917, SCWC filed application No. 12-718 with the State Water Resources Control Board (State Board) to appropriate 13,300 acre feet per year. The State Board granted certificate 12-5 on September 19, 1918, allowing SCWC until 1921 to put the water to full beneficial use. (D- 3383, at 2.)”  After Sheep Creek Water Company failed to complete it’s water project in time, the original grant was lowered to 3000 acre feet in 1926, which are the water rights the company holds today.  The fact these aren’t pre-1913 water rights could potentially leave us vulnerable to legislative or administrative action in a statewide water crisis.
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2. Sheep Creek Water Company almost certainly will be unable to sell the water rights without selling the company, and also can’t sell the company without including the water rights and all supporting infrastructure and land. On page 5 we find: “There are cases that involve the purchase or condemnation of a private or mutually held water company. These cases hold that the water rights and the system used to serve the rights are connected and cannot be separated for purposes of acquisition.”  There’s more detail about this issue elsewhere in the write-up.
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3. If Sheep Creek were to sell the system to a private company or consolidate with PPHCSD (a municipal provider), there would be a requirement that shareholders continue to receive water, but the water rights we currently have through shares would no longer apply (from page 6): “when a municipal system takes over a mutual or privately held water system, the obligation to provide service to the shareholders remains… However, the service of providing water would be in the context of water provided to a municipal customer – after the acquisition of the water system, the water service would not longer be through rights as a shareholder.”

The Sheep Creek Water Company Board of Directors meeting on Tuesday, August 18, 2023 was a contentious affair.  Because there was significant shareholder and community interest in the potential sale of Sheep Creek to a private conglomerate called Central States Water Resources, owned entirely by the private equity group Sciens Asset Management, the meeting was moved from the Sheep Creek office to the Snowline JUSD boardroom.  According to Mr. Andrew Zody, the representative from Central States wasn’t able to attend this meeting, but they are still planning to attend to a meeting in the future for a presentation, so we will need to keep a sharp eye on this one.  I will be writing a post soon about why selling our water company to a private equity firm is the absolute worst possible scenario for current customers of Sheep Creek Water Company and the community of Phelan.

The biggest news coming out of the meeting for shareholders was practically buried.  The new well near Beekley Rd. is finished.  However, that’s the only update we received.  No news whatsoever about updated test pumping results, or any information about how much water the well will provide the community.  Not a surprise this is being kept quiet – if the well is very good, the compliance order from the State Water Resources Control Board (SWRCB) will be lifted.  If the well isn’t very good, shareholders will need to shell out another $1+ million to pay for at least one more well.

The well production is a big deal for shareholders.  If the compliance order is lifted, the board is going to have to raise water allotments, by law.  This would also mean the Tier 3 cash cow the company uses to pay for all sorts of things (like the share buyback and a new truck for the GM) will go away.  If the well production isn’t very good, we are still stuck dealing with an allotment that makes water use essentially unaffordable for many, if not most, Sheep Creek customers.

In other news, the board spent some time discussing how they are working really hard to implement Robert’s Rules of Order in their meetings.  Kelli Williams mentioned that from now on the minutes will not be as informative as they’ve been in the past.  Once again, the board is doing everything they can to restrict information given to shareholders, using any excuse they can come up with.

Of course, in implementing Robert’s Rules of Order, they also said they will not be responding to shareholder questions about items not on the agenda.  Which, ok, that’s their right.  But if you’ve attended other public meetings operating under various “rules of order”, you’ll notice that when someone brings a question that can’t be answered because it’s not on the agenda, they make a point to include that item on the agenda for the next meeting, and allow for discussion of the item.  Sheep Creek Water Company is not planning on doing that.  They’re just not going to answer shareholder questions anymore.

Just as an example of this, at the July meeting, I asked the Board of Directors about the Chromium 6 levels in at least one of the company’s wells being over the state limit.  You can see this on the water quality report here, if you scroll to the second page and look at “Hexavalent Chromium (+6), you see there is a range of detectable levels from ND (non-detectable) to 14, with the state’s maximum level allowed level at 10.  At the July meeting, I asked about this from the 2021 water quality report, and they didn’t have an answer for me, but said the new water quality report was coming out soon.

The new report is out, but they didn’t include this on the agenda for discussion, despite not having an answer in July.  So I asked my question again, about the new report and what plans the company has to address this problem, and again, they didn’t have an answer, but this time because they won’t answer questions that aren’t on the agenda.  But they also didn’t add it to the agenda for the next meeting.  This isn’t new, I’ve asked before to have items added to the agenda, and they refuse to do it.  Narrative control, that’s what this board wants, and they will not address any valid shareholder question that challenges their control of the narrative.  Period.

Speaking of questions, I also asked the board what collateral was used to secure the line of credit they obtained to pay for the newly finished well.  No answer on that question either, nor was it placed on the agenda for the September meeting, but make no mistake this is a big question.  Shareholders are on the hook for this loan whether or not the members of the board stick around in the future.  We deserve to know what could be lost if the company goes insolvent.  For my part, I certainly hope they didn’t pledge Sheep Creek Water Company’s 3000 acre feet of water rights in the canyon below Wrightwood to pay for the well.  Certainly not without bringing it up to shareholders in advance.

Also of note, this month Sheep Creek Water Company only had a water loss of 21+%.  As always, they have excuses for why the water loss is so high, which basically all boils down to the company’s equipment and hardware is too old, and so they aren’t able to keep track of the water.  Just as a reminder, anything over 10% is considered high, so no matter what the excuses are, it should be lower.  They need to do better by shareholders and customers.

Speaking of doing better, since we are still stuck dealing with the compliance order, the company was capable of producing more than 7x the water that was consumed and lost combined in July.  We have water coming out of our ears, but the allotments stay low, and we’re stuck.  I have consistently stated the Board of Directors has not shown the proper urgency to deal with this situation at any point since the compliance order was served in 2018 by the SWRCB, and it really shows right now.

On the subject of the SWRCB, the board decided to meet in closed session to discuss “SWRCB negotiations” despite this clearly violating the Open Meetings Act.  I have already sent a letter to the company noting this problem, and intend to follow up with civil action if they do not cure the issue, as allowed by the Open Meetings Act.

Finally, to address the elephant in the room: Andy Zody, the President of the Sheep Creek Water Company Board of Directors, opened the meeting with a few choice remarks.  Mainly about this website, comments on Facebook, and me personally.  He discussed some specific Facebook comments he claimed were wrong, and also mentioned that the company has filed a UDRP complaint against this website on the grounds of a trademark violation, despite the fact they do not have a registered trademark for any part of the company’s name, and also despite the fact Sheep Creek Water Company registered this domain name in 2016 but decided not to renew it in 2020.  They abandoned their trademark, but now are mad it’s being used to keep shareholders and customers up-to-date on what’s going on with the company.

I was indeed served a UDRP complaint, and I will respond.  My favorite part of the complaint is where they mention that because this website has “Sheep Creek News” as a section for company-related news, my website is confusingly similar to the official website, which also has a section for News.  Of course, they don’t bother to mention that when you click on “News” on their website, the page is blank.  Apparently Sheep Creek Water Company does not (and never has, as long as I’ve been checking) considered any information about the company whatsoever to be newsworthy.  Anyways, out of an abundance of caution, I have registered a domain name ready to transfer this blog to if they do somehow win this case.

Back to Andy Zody’s remarks.  He mentioned his desire to put his fist in my face, which is beyond inappropriate for any member of the board to say to a shareholder.  The fact that none of the other board members spoke up until later, not even Rev. Eric York, the pastor of the Harvest Christian Center Assembly of God here in Phelan, says all we need to know about the character (or lack thereof) of the current members of the board.  Just a very sad situation.

Listen for yourself:

 

 

The Sheep Creek Water Company Board of Directors met again last Tuesday, July 18.  Probably the most important part of the meeting didn’t actually happen – a representative from Central States Water Resources was scheduled to attend the meeting for a presentation, but bad weather in the midwest prevented that.  The representative asked if the meeting could happen over Zoom, but since the Board of Directors suspended use of Zoom along with other changes that limit shareholder participation in the meetings, the presentation had to be postponed.  The presentation is now scheduled for the next board meeting on August 15.

According to their website, Central States Water Resources (CSWR) “is parent company to 16 utility operating companies across 11 states.”  The corporate headquarters is located in Des Peres, Missouri. CSWR owns subsidiaries in Arizona, Arkansas, Florida, Kentucky, Luoisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, and Texas. CSWR does not currently own any subsidiaries in California.

CSWR is a private, investor-owned, regulated water utility company with a national footprint across 11 states. In fact, CSWR is the 11th largest water and wastewater utility company, and the single largest operator of wastewater plants in the United States.

I believe it would be an absolute disaster for the community if Sheep Creek Water Company was sold to this out-of-state conglomeration.

In other news from the evening, the board approved a $4,800 quote to install 27 feet of 6′ chainlink fence around Well 8, along with installing several gates that SCWC will provide.  It’s a mystery why it’s going to cost $4800 to install 27 feet of fencing plus some gates.  Home Depot has 50 feet of 6′ fencing available for pickup in Victorville for $138 plus tax.  Maybe someone smarter than me can figure out why shareholders are paying around $4500 in labor costs for this installation.

At the annual meeting director Kellie Williams had mentioned she wanted to upgrade the billing infrastructure.  At the board meeting it was reported that Sheep Creek has only found one company that might be able to provide a billing system, and they aren’t sure yet that it will be compatible with our water allocation by share.  Hopefully they will find some other possibilities.

It was reported the company might receive a grant to purchase a new tractor.

There was also discussion about reviewing and raising the cost of meters to match the charges by other utilities and water companies in the area.  So far this year, the company has produced 246.64 acre feet of water, of which 53.19 acre feet has been “lost” or not charged through meters.  The EPA estimates that nationally water companies average 14% water loss, but so far this year Sheep Creek has lost more than 21% of the water the company has produced.  Hopefully if meter costs are going to go up, the company will also invest in the infrastructure other companies use to help maximize water efficiency and minimize water loss.

Finally, the GM reported on the situation with the new well.  Pilot hole for the well is drilled to 1920 feet.  Thy had to dig so deep because precursors for Chromium 6 were found at higher levels, so had to dig well below there to get “potable” water.   The ream hole, which is where they will put the casing, is currently drilled to ~500 feet. The rig was down for a bit, but they have got it working again in the last few days – although I can report that my ears tell me the rig has been up and down over the past week, though it is working now as I write this. They have done some test pumping that went well, but don’t know exactly what the well will produce. A hydrogeologist is guessing it will fall somewhere between 115 gallons per minute and 375 gallons per minute. We won’t know how this well impacts the compliance order until they finish it, then present the final details to the state. That’s when we find out if we need to keep digging wells.

A share is a share.  Everyone knows this, it is one of the basic fundamentals of corporation law.

California Corporations Code Section 400 (b) states the following:

All shares of any one class shall have the same voting, conversion and redemption rights and other rights, preferences, privileges and restrictions, unless the class is divided into series. If a class is divided into series, all the shares of any one series shall have the same voting, conversion and redemption rights and other rights, preferences, privileges and restrictions.

Sheep Creek Water Company has 8000 shares, owned by more than 1400 shareholders.  All shares in Sheep Creek Water Company are of the same class, and they are not divided into series.

However, the allocation of water is not the same for all 8000 shares.  The first share on every customer account receives 750 hundred cubic feet (HCF) of Tier 1 water.  All other shares on that account receive 150 HCF of Tier 1 water.  First and Second (and Third and Fourth and etc.) are not different series’ of shares, they are an abritrary designation of priority.

Quite simply, the current water allocation by share which Sheep Creek Water Company uses is in violation of the California Corporations Code.  Despite the shareholder vote to change the by-laws allowing this water allocation, the by-laws are still governed by the California Corporations Code.  Any disagreement, and the Corporations Code wins.

Shareholders with more than 1 share who have had to pay Tier 3 prices because of this inequitable water allocation have suffered actual monetary damages.

The minutes from the June board meeting were released in advance of the July 18 meeting, and mentions this tidbit:

“Zody has a connection with a 3rd party company who are interested in purchasing water companies and inviting them to an upcoming meeting for a presentation.”

Selling Sheep Creek Water Company to a private company would be a disaster for the current shareholders and customers of Sheep Creek Water Company. Water prices will be raised significantly, and we can also assume that necessary infrastructure upgrades will not be prioritized because of the cost.

That said, personally I think private companies will not be jumping at the “opportunity” to purchase Sheep Creek Water Company. Last year’s proposed consolidation with PPHCSD fell through because California decided not to fund the purchase of water rights, and they also said “California is not in the business of buying failed water companies.”

If the state thinks Sheep Creek is a failed water company, surely private companies will come to the same conclusion after doing their due diligence.

Nonetheless, this is not a time for apathy. This is our water company, and things are not great right now, but if we pull together, we can fix the problems and continue to provide water to this community for generations, much like Sheep Creek Water Company has done for well over 100 years already.

One last note: here is board member Dave Nilsen at last summer’s ice cream social to discuss consolidation: “I think it would be a disaster if we sold this [Sheep Creek] to a private water company”, at the one hour mark of the below video.

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.