{"id":377,"date":"2023-08-18T17:34:13","date_gmt":"2023-08-18T17:34:13","guid":{"rendered":"https:\/\/scwcshareholders.org\/?p=377"},"modified":"2023-08-18T17:43:18","modified_gmt":"2023-08-18T17:43:18","slug":"8-15-23-board-meeting","status":"publish","type":"post","link":"https:\/\/scwcshareholders.org\/?p=377","title":{"rendered":"8\/15\/23 Board Meeting"},"content":{"rendered":"

The Sheep Creek Water Company Board of Directors meeting on Tuesday, August 18, 2023 was a contentious affair.\u00a0 Because there was significant shareholder and community interest in the potential sale of Sheep Creek to a private conglomerate called Central States Water Resources<\/a>, owned entirely by the private equity group Sciens Asset Management<\/a>, the meeting was moved from the Sheep Creek office to the Snowline JUSD boardroom.\u00a0 According to Mr. Andrew Zody, the representative from Central States wasn\u2019t 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.\u00a0 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.<\/p>\n

The biggest news coming out of the meeting for shareholders was practically buried.\u00a0 The new well near Beekley Rd. is finished.\u00a0 However, that\u2019s the only update we received.\u00a0 No news whatsoever about updated test pumping results, or any information about how much water the well will provide the community.\u00a0 Not a surprise this is being kept quiet \u2013 if the well is very good, the compliance order from the State Water Resources Control Board (SWRCB) will be lifted.\u00a0 If the well isn\u2019t very good, shareholders will need to shell out another $1+ million to pay for at least one more well.<\/p>\n

The well production is a big deal for shareholders.\u00a0 If the compliance order is lifted, the board is going to have to raise water allotments, by law.\u00a0 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.\u00a0 If the well production isn\u2019t very good, we are still stuck dealing with an allotment that makes water use essentially unaffordable for many, if not most, Sheep Creek customers.<\/p>\n

In other news, the board spent some time discussing how they are working really hard to implement Robert\u2019s Rules of Order in their meetings.\u00a0 Kelli Williams mentioned that from now on the minutes will not be as informative as they\u2019ve been in the past. \u00a0Once again, the board is doing everything they can to restrict information given to shareholders, using any excuse they can come up with.<\/p>\n

Of course, in implementing Robert\u2019s Rules of Order, they also said they will not be responding to shareholder questions about items not on the agenda.\u00a0 Which, ok, that\u2019s their right.\u00a0 But if you\u2019ve attended other public meetings operating under various \u201crules of order\u201d, you\u2019ll notice that when someone brings a question that can\u2019t be answered because it\u2019s 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.\u00a0 Sheep Creek Water Company is not planning on doing that.\u00a0 They\u2019re just not going to answer shareholder questions anymore.<\/p>\n

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\u2019s wells being over the state limit.\u00a0 You can see this on the water quality report here<\/a>, if you scroll to the second page and look at \u201cHexavalent Chromium (+6), you see there is a range of detectable levels from ND (non-detectable) to 14, with the state\u2019s maximum level allowed level at 10.\u00a0 At the July meeting, I asked about this from the 2021 water quality report, and they didn\u2019t have an answer for me, but said the new water quality report was coming out soon.<\/p>\n

The new report is out, but they didn\u2019t include this on the agenda for discussion, despite not having an answer in July.\u00a0 So I asked my question again, about the new report and what plans the company has to address this problem, and again, they didn\u2019t have an answer, but this time because they won\u2019t answer questions that aren’t on the agenda.\u00a0 But they also didn\u2019t add it to the agenda for the next meeting.\u00a0 This isn\u2019t new, I\u2019ve asked before to have items added to the agenda, and they refuse to do it.\u00a0 Narrative control, that\u2019s what this board wants, and they will not address any valid shareholder question that challenges their control of the narrative.\u00a0 Period.<\/p>\n

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.\u00a0 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.\u00a0 Shareholders are on the hook for this loan whether or not the members of the board stick around in the future.\u00a0 We deserve to know what could be lost if the company goes insolvent.\u00a0 For my part, I certainly hope they didn\u2019t pledge Sheep Creek Water Company\u2019s 3000 acre feet of water rights in the canyon below Wrightwood to pay for the well.\u00a0 Certainly not without bringing it up to shareholders in advance.<\/p>\n

Also of note, this month Sheep Creek Water Company only had a water loss of 21+%.\u00a0 As always, they have excuses for why the water loss is so high, which basically all boils down to the company\u2019s equipment and hardware is too old, and so they aren\u2019t able to keep track of the water.\u00a0 Just as a reminder, anything over 10% is considered high, so no matter what the excuses are, it should be lower.\u00a0 They need to do better by shareholders and customers.<\/p>\n

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.\u00a0 We have water coming out of our ears, but the allotments stay low, and we\u2019re stuck.\u00a0 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.<\/p>\n

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.<\/a>\u00a0 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.<\/p>\n

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.\u00a0 Mainly about this website, comments on Facebook, and me personally.\u00a0 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\u2019s name, and also despite the fact Sheep Creek Water Company registered this domain name in 2016 but decided not to renew it in 2020.\u00a0 They abandoned their trademark, but now are mad it\u2019s being used to keep shareholders and customers up-to-date on what\u2019s going on with the company.<\/p>\n

I was indeed served a UDRP complaint, and I will respond.\u00a0 My favorite part of the complaint is where they mention that because this website has \u201cSheep Creek News\u201d as a section for company-related news, my website is confusingly similar to the official website, which also has a section for News.\u00a0 Of course, they don\u2019t bother to mention that when you click on \u201cNews\u201d on their website, the page is blank.\u00a0 Apparently Sheep Creek Water Company does not (and never has, as long as I\u2019ve been checking) considered any information about the company whatsoever to be newsworthy.\u00a0 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.<\/p>\n

Back to Andy Zody\u2019s remarks.\u00a0 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.\u00a0 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.\u00a0 Just a very sad situation.<\/p>\n

Listen for yourself:<\/p>\n

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