Top of the list from the meeting last night, the Board is discussing giving themselves authority to purchase shares from shareholders – up to 5 per shareholder, up to 50 per year, using money from Tier 3 that is supposed to pay for capital improvements and other pressing maintenance needs.\u00a0 They want to hold these shares and then offer them back up for sale at a higher price.\u00a0 Dave Nilsen said he thought the price should be $3,250 per share, since that was the value of the water company according to the assessment made during the now-failed consolidation process.<\/p>\n
With current for-sale share prices hovering around $1,000 and up, this means the board wants to spend $50,000+ per year of shareholder money to buy back shares and take them out of circulation.\u00a0 That amounts to about $40 per connection per year, or $35 per shareholder per year.\u00a0 Instead of giving that money back to shareholders (Tier 3 water comes from unused shareholder allotments, after all), decreasing the monthly base rate charged to customers, or saving that money for fixing the myriad problems with Sheep Creek Water Company’s infrastructure, the board wants to take shares out of circulation.<\/p>\n
Why?\u00a0 Hard to say really.\u00a0 Certainly, once the company buys those shares, they can’t be voted, so that’s 50 fewer shares that can be used to vote the board out of office.\u00a0 Removing those shares from circulation guarantees that those shares won’t be used to purchase water, so could help keep water usage down overall.\u00a0 Probably the main reason though is the company wants to artificially force the price of shares higher, so that current large shareholders who want to sell can get more money for their shares.<\/p>\n
I think the best way to increase the value of shares in Sheep Creek Water Company is to fix all the problems with the company, and make it a viable water company for the next 20+ years and on into the future, able to meet the needs of the community it serves.\u00a0 Instead, we have a board of directors happy to keep the company limping along from crisis to crisis.<\/p>\n
Other takeaways from the meeting:<\/p>\n
– The well at the Steinmann property on Nilsen\/Sheep Creek Rd. is currently on hold because of Joshua trees.\u00a0 They are focusing on drilling a well at the Cambria property in the short-term.\u00a0 If there is water at that property, they may approach Mojave Water Agency to have that water included in Tier 1 water, since that well is technically in the El Mirage Valley where Sheep Creek Water Co holds water rights.<\/p>\n
– The recent water rate increase was approved in the 2023 operating budget, which was discussed by the board in closed session, in violation of AB240 Open Meetings Act requirements.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
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