Author: shannon

Neighbors for Better Water Wins Judgement, Judge Claims Board Acted in “Bad Faith”.

Judge Weiner of the San Mateo County Court has issued a judgement in favor of Neighbors for Better Water and has declared them the winner of the 2019 board election.

In her judgement, Judge Weiner states that the previous board acted in “bad faith” by denying shareholders the right to vote who were late in paying their bills, but only those shareholders that voted for Neighbors for Better Water. She also states that the shareholders Hill, Macias, Chaudhari and Pekary are installed as board members.

The current board of the water company is appealing the decision, using Company (member) funds, and so the judgement is stayed on appeal and does not yet take effect.

References:

https://neighborsfbw.org/wp-content/uploads/2023/08/Notice-of-Entry-of-Judgment-as-filed-062623.pdf

https://neighborsfbw.org/wp-content/uploads/2023/08/CIV-00851-Final-Statement-of-Decision.pdf

All in the Family

Niambi Lincoln “inherited” the General Manager position from her mother, Katherine Loudd, in early 2018. However, Ms. Loudd not only continued to receive a salary but received a raise!

If you look at the latest newsletter, you will see that Niambi Lincoln is not only the paid General Manager AND a Board Member AND the Treasurer (The General manager should NOT be the Treasurer – a clear lack of segregation of duties.), but her family members also are paid staff at the water company, including her husband Bryan Lincoln and her brother Jabari Loudd. In the past, she has had other family members working at the company too.

Note that over the last few decades, NO ONE ELSE appears to have had the position of Treasurer other than the General Manager: Katherine Loudd or her daughter Niambi Lincoln. This is a huge lack of accountability, particularly since the Company’s leadership has refused to have an external audit during all this time, and Shareholders have repeatedly been denied their right, per the bylaws, to inspect records.

There is no way that a board that consists of family members and a staff of those same family members can provide accountability to the share holders.

Water Company Puts Lien on Everyone’s Property!

The water company’s own rules, and state law, allows the water company to put a lien on a property if the property is behind in its payments. Apparently the water company is now putting illegal liens on everyone’s properties, even if they pay on time. The following is from a property owner in the area.

Just wanted to raise something to your attention, in case it can help you and your case.

We’re refinancing our house and the title company called with a strange finding as they were about to fund the transaction / close title this morning.

They noticed the house title had a lien on it from the water company and advised that I may be delinquent on my bills, that’s the only time they see a utility company put a lien on a property. A bit of research confirmed this practice being dependent on unpaid / delinquent bills. I’ve always paid the water company on time.

I called the water company when they opened and quickly escalated the conversation when the first person I talked to didn’t have a good explanation. The next more senior person explained they have a lien on every single house, and charge 2 months of water payments in advance with any sale or refinance
I asked about the $60 fee they added, and they explained it’s for all the paperwork required (which is ridiculous, they just send the bill to the title company for the advance water payments and the fee!).

This feels sketchy to me, I’m not even sure if it’s legal. If it’s not legal – I would be inclined to pursue legal action.

Update

Sept. 2021. In testimony in our court case against the company, the general manager admitted that they do, in fact, put a lien on all properties in the water district.

Water Company Charges $2,700 for Meter

We have heard that the water company is beginning to force people to pay for the installation of water meters in certain properties, and charging an outrageous amount of money for them. Here is a letter from one home owner:

Dear Shannon,

My husband and I are new residents of the City of East Palo Alto. In September, 2019, Palo Alto Park Mutual Water Company informed us that we have to replace the fireflow protection meter installed at my property. The cost would be $2,700. Since the previous owner told us that he replaced all water meters(we have 2) and complied with PAPMWC’s requirements in order to obtain all permits required to final construction/remodeling, I requested by phone and email a copy of the latest (2018) approval of the water meter replacement, to which the company never responded.

Water Company Turns Away Almost $400,000 in Assistance from the State

The Division of Financial Assistance offered Prop 1 assistance to help PAPMWC produce the planning documents for construction of equipment upgrades.  The DFA has set up the Prop 1 funding where they assign their own work team to complete the work.  In this case, it would have been Sacramento State University and other assorted private consulting firms rounding out the team.  However, PAPMWC turned down that particular assistance.  Depending upon the developed workplan, this could have entailed as much as  $400,000 in assistance provided without cost to the community.  Instead Niambi’s sent a letter to them indicating that PAPMWC wanted to continue on the path with CRWA assistance to complete the funding application while also using its own engineering firm.

There was several attempts to explain to Niambi the service that Prop 1 funding would provide, but to no avail.  Eventually, DFA determined to withdraw all help using third party assistance providers to PAPMWC.  PAPMWC is now on their own for planning or constructing any system infrastructure project.

Click here for the letter the state has sent to PAPMWC. https://neighborsfbw.org/wp-content/uploads/2019/12/Palo-Alto-Park-Mutual-Water-Company-Rescind-Letter.pdf

State Agency Issues 3 New Citations Against PAPMWC

In a string of attention getting citations, the State Water Resources Control Board is calling the leadership of the Palo Alto Park Mutual Water Company to task for gross negligence or incompetence in running our water company and putting us all at risk.

Niambi Lincoln, the new general manager and daughter of the previous general manager Katherine Loudd, made no mention of these citations in the latest newsletter, and appears to be trying to sweep these serious charges under the rug.

Below you will find the full text of the three citations:

Citation 1

Citation 2

Citation 3

State Agency Says Help For PAPMWC is a Long Way Off

Eric Lacey, the head of the State Water Resources Control Board, had this to say about the water company’s plans for obtaining grant money from the state when I asked him to corroborate the company’s recent statements that they are about to receive a grant.

It’s my understanding that Rural California Assistance Corporation, RCAC, has been contracted to perform the income survey. I’ve heard they are backlogged and  it could take a year to a year and a half to complete the survey.  Only after it is completed will we know what state funding can be made available. 

The Division of Financial Assistance (DFA) has also agreed to perform an income survey for the Palo Alto Park MWC service area.  I’m not sure of the status, but I believe they have, or about to, award the contract to a third party consulting firm.  This is a lengthy process that could take many months to complete.  (The last one I saw completed for a 30 home system took 9 months!)  You’ll know that it is underway when community members get contacted directly about the income survey.  The completion of the income survey and its findings will determine if PAPMWC is qualified for a grant or loan, or a combination of the two.

As a side note, I learned last week that much of the grant funding that was once available has already been earmarked for other projects.  (We’re in that part of the funding cycle.)  At the moment, very little grant funds are currently available for new projects.

So, to answer your question: No, PAPMWC has not been approved for grant funding.  I believe that statement that they are is premature and possibly wishful thinking.

Neighbors for Better Water Files Suit

Neighbors for Better Water Files Suit Against Palo Alto Park Mutual Water Company

Neighborhood group seeks to replace the board of directors of East Palo Alto water company

East Palo Alto, California – March 14, 2018 – A coalition of home-owners have filed suit against the Palo Alto Park Mutual Water Company (Palo Alto Park), which provides water to over 600 homes in East Palo Alto. The group, known as Neighbors for Better Water, is seeking to recall the board of directors and elect a new board. The challengers from Neighbors for Better Water claim that the water company has selected particular residents for unfair treatment and have mismanaged the company.

The suit states that at the annual shareholder meeting in September of 2017, the Palo Alto Park board members would only allow shareholders to vote on two of the five open seats on the board, even though the terms for all five members were expiring. Neighbors for Better Water attempted to amend the agenda to elect five board members, but the president of the board would not allow the change and eventually adjourned the meeting without holding an election.

Palo Alto Park is one of over 2000 mutual water companies in the state of California. These companies are private corporations, whose shareholders are the property owners in the district. As private corporations, they do not have the government oversight that most utilities have. Only the State Water Resources Control Board (SWRCB) has the ability to inspect the operations and safety of the water these companies produce, but the SWRCB has limited enforcement powers.

Palo Alto Park was started in the 1920’s to serve some of the poultry farms of the Ravenswood area that would later become a part of East Palo Alto. Its water comes from wells that tap deep aquifers underground. Since the founding of Palo Alto Park, the 101 freeway was built, passing through the water district, and the farms have become subdivisions serving many more homes and residents than had been originally intended. After a number of recent pump failures and water quality citations from the SWRCB, many local residents have become concerned that the current management, which has been in place over 20 years, is unable to keep up with the demand created by the growth in the area.

“Our rough estimate is that 90% of area residents do not drink the water”, said Norm Picker, one of the challengers for the board of directors. “The water appears to be very hard and is high in iron and manganese, and while these do not necessarily make the water unsafe, it makes residents nervous”. In fact, since January of 2014, the SWRCB has cited Palo Alto Park for elevated levels of iron, manganese and coliform in the water[1].

In response to these concerns, area residents banded together and began collecting shareholder proxies in an attempt to unseat the current board or directors. Shannon Pekary, a representative of Neighbors for Better Water, explains, “City, county and state officials have all told us the same thing, that only the shareholders can fix this.  Well, we tried, but we were denied a fair vote.”

The suit states that shareholder Irene Laudeman, a proxy holder for over 43% of the shares in Palo Alto Park, ordered the company to hold a special shareholder meeting to complete the vote that was supposed to happen in September of 2017. The company did not respond. The suit is asking the court to force the company to have a shareholder meeting to recall the board and complete the vote. The Palo Alto law firm of Mayer-Brown is providing pro-bono legal assistance to the group. A hearing is scheduled for March 28.

Contact:
Shannon Pekary, spekary@gmail.com
Irene Laudeman, irene@ilaudemanllc.com
Neighbors for Better Water, http://www.neighborsfbw.org

[1] http://neighborsfbw.org/index.php/2017/10/15/water-quality-citations/