Category: Articles

Niambi Lincoln and her mother, Katherine Loudd, purport themselves to be board members of the water company.

If you look at the latest newsletter, you will also see that Niambi Lincoln is the paid General Manager, and her family members also are paid staff on the water company, including her mother Ms. Loudd, her husband Bryan Lincoln, and her brother Jabari Loudd. In the past, she has had other family members working at the company too.

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.

In 2017, Neighbors for Better Water (NFBW) was formed by concerned residents in East Palo Alto who are in the Palo Alto Park Mutual Water Company district. Many of these residents had experienced illegal charges and rude treatment from the staff of the water company, and were very unhappy with the quality of the water. Additionally, when they brought these concerns shareholder meetings, they discovered that the company was run by one family, and they had very little interest to change.

Shareholder Meeting September, 2017

In September of 2017, NFBW went to the shareholder meeting with enough proxies to elect a new board. Board president Fidel Alas realized that he was going to lose, and so he refused to have an election for the entire board, and instead only allow a vote for 2 board members, even though the notice for the meeting included an election for the entire board. He shut down the meeting without having an election, and the old board continued to run the company though they were all past their term of office.

Special Shareholder Meeting May, 2018

NFBW then presented a demand from a moajority of the shareholders to hold an election, and the board refused. We then went to court and the court agreed with us and forced them to have another election. The problem was, the court left board president Alas in charge of that election. In May of 2018, after two days of vote counting, the inspectors of the election declared NFBW the winners. Mr. Alas the next day threw out the result, started the count completely over with his own personally appointed inspectors, who threw out most of NFBW proxies for illegal reasons and declared themselves the winners.

NFBW then filed another court case to have the court decide the election. Despite state law stating that courts must set a date for such matters within 10 days of filing, the court refused, citing a lack of resources due to the governor not appointing enough judges. They then scheduled a pretrial hearing 3 months later. That date was delayed, and delayed, and delayed again. In the mean time, the previous board tried to derail the court case.

Special Shareholder Meeting August, 2019

The illigitimate board held a special shareholder meeting to change the Articles of Incorporation, and later the Bylaws, ostensibly to improve the company. The real reason was to change the schedule of voting for elections so that they could hold all new elections and declare our lawsuit moot.

At this meeting, they claimed to rewrite the Articles, turning the company into what is known as a Mutual Benefit corporation (not to be confused with a Mutual Water Company, which is what the company is, but the word Mutual means something totally different here). The problem was, state law says that Mutual Benefit companies cannot have partial votes for members, but most people in the company had just that, partial votes. The other problem the company had was that in order to change it to single votes, the company was required to get the approval of EVERY shareholder in the company, not just a minority.

The company simply ignored the law and did it anyways, claiming they had a majority of shares by proxy. When the shareholders at the meeting asked to see the proxies and count them, board president Alas and general manager Lincoln simply said no.

Shareholder Meeting December, 2019

Since our lawsuit was still pending, we were forced to again gather proxies and challenge the family for control of the company. After counting of proxies for a week, we were declared the losers by a very slim amount. After reviewing the proxies ourselves, we realized that we had, in fact, won again, but again, we were ignored.

We then filed another lawsuit challenging these results. That lawsuit was joined with the previous one, and again, our request to have a 10-day hearing, as provided by law, was denied by the courts.

We were finally granted a trial date in May of 2020, but Covid hit, the San Mateo County court system shut down all civil trials, and we waited, and waited.

Trial June, 2021

Testimony for the trial began in June of 2021. We had 3 days of testimony, then a 1 month break, then 3 days of testimony, then a 2 month break, and then 1 day of testimony. Testimony has completed, but we are now waiting for the court reporters to deliver transcripts of the testimony so our lawyers can complete the final arguments. As of Nov. 29, we have not heard from the court, and they have not told us when the transcripts will be available.

Below are some excerpts and quotes from the article “Troubled Water” by Kate Bradshaw of The Almanac. For the complete article, go to https://paloaltoonline.atavist.com/troubledwater.Troubled Water

The day he left East Palo Alto to attend his grandmother’s funeral across the country, Justin Turner’s water was shut off.

He had to leave his wife, nine months pregnant and due to deliver any day, at home without water, after trying fruitlessly for months to have a simple question answered by his water company, the private nonprofit Palo Alto Park Mutual Water Company: Why is my bill so high?

“They’ve probably been the least cooperative of the water districts we work with as far as being forthcoming with information,” 

– Harold Schapelhouman, Menlo Park Fire Protection District Chief

“I don’t think staff is working for improvement. I think they’re primarily showing up and doing what they’ve always done,” 

– Eric Lacy, State Water Resources Control Board

“I think the City Council has been very concerned, but we don’t have jurisdiction … I personally hope that the court will intervene in a way that they do help that entity to become more responsive to the needs of their customers,” 

– Ruben Abrica, East Palo Alto City Councilmember

In response to recent demands from the State Water Resource Board after their recent inspections, the water company issued 2 letters to describe short term repairs, and their plans to fix the iron and manganese problems.

Some concerns highlighted in these reports:

• The company lists over 2 million dollars worth of immediate repairs and upgrades needed.
• The upgrades do NOT include building a plant to remove the iron and manganese, but rather to do a lower-cost, less effective treatment that involves over-chlorinating the water. The Water Resources Board has said in previous letters to the Company that over-chlorination can cause other problems.

Here is a summary of the repair estimates:

Iron and Manganese for Well 7 only	$314,640
Well 3 replacement	$166,980
Repair pipes under Highway 101	$122,820
Well 2 replacement	$166,980
Install Water Meters for All Properties	$408,480
Replace Green Street Main	$289,800
Replace Glen Way Main	$335,340
Replace Bell Street Main	$289,800
Build a Second Storage Tank	$747,960
Total	$2,842,800

The actual letters from the Company are  below.

• Response 1 to State Water Resource Board
• Response 2 to State Water Resource Board

In the last few years, the water company has received 4 citations by the State Water Resources Board for violations of water quality regulations.

• Too Much Iron
• Too Much Mangagese 1
• Too Much Manganese 2
• E. Coli

In addition, the State Water Resources Board was scheduled to do a quality  assessment on September 25, but the water company canceled that audit and has delayed it.

Many of our neighbors are complaining about Impact Fees, which the company is charging people for a variety of things, from parking a camper in their driveway, to doing major renovations.

While I don’t know for sure, my guess is that impact fees originate from the fact that we are all “supposed” to be charge pretty much the same amount for our water. The current fees I think are $58 plus $1 per share, which for a standard 5,000 sq. ft. property comes out to $60/month.

However, some houses have one person living at a house, and some have 10. How is that fair?

Well, the fairness part is primarily I think due to the fact that the major cost of delivering water to each house is the plumbing and equipment. The amount of water we use has some expense, but is not the major expense.

When someone does a renovation on their house, the water company is supposed to do a review of the plans, and could potentially charge a fee for the expense of reviewing the plans, and whatever additional burden the new renovation will have on the system. However, without meters, its not possible to measure this burden. So, the water company appears to be trying to make up for this by charging “impact fees”, from $2,500 to $5,000.

These impact fees have no basis in law, nor does the water company explain how they compute them. The amounts seem excessive. They also appear to be charging them in situations where there is no impact to the water, including when people change out the windows in their house, or just park a camper in the driveway.

There was also a Class Action Lawsuit many years ago that ended with a judgement against the water company, ordering the water company to stop charging these fees until they put them in the Bylaws, and making sure they were only charged when there was an actual impact to the water. The company appears to be ignoring this court order.

As a property owner in the Palo Alto Park Mutual Water Company area, you have shares in the company. You have one share for every 2500 sq ft of land you own, and these shares give you certain rights. However, for rights to matter, you must exercise them. Here are some we know about, but its not an exhaustive list.

Vote at the Shareholder Meeting

Your shares give you votes at the annual shareholder meeting. You can vote on board members, on changes to the bylaws, and on various matters that come up at the meeting, like approval of minutes, agendas, etc.

If you cannot attend a meeting (or don’t want to), you can allow someone else to vote on your behalf by appointing them as your proxy using a proxy statement.

Shareholder meetings must be noticed at least 10 days before the meeting is to take place, and the business of the meeting must be clearly stated.

Attend and Know About Board Meetings

Assembly Bill 240 (AB240) put certain requirements on the boards of mutual water companies. In particular, it makes all board meetings into public meetings similar to how the Brown Act works for governmental meetings.

AB240 does the following:

• Requires that all board meetings have an agenda that is publicly posted before the meeting. The board must stick to the agenda, except in exceptional or emergency situations.
• If you request it, the board must send you a notice of all board meetings. You can ask to be notified by mail or email.
• If you have a fee or penalty, you can demand that the board meet with you in closed session to discuss it.
• Requires that the minutes of all board meetings be sent to any shareholder that asks.

Inspect the Accounts of the Company

Both the Bylaws of the company, and California Corporations Code 1601 give you the right to inspect the financial records of the company at any reasonable time upon written request.

Inspect the List of Shareholders

California Corporations Code 1600 allows any shareholder with cause (a good reason) to get a list of all the other shareholders in the company. 5% of the shareholders can join together and request a list of the shareholders for any reason at all, and get them within 5 days of the demand.

To make requests of the board, you should send your requests directly to the members of the Current Board, since we have some evidence that the central office is not forwarding mail on to the board members.

Unfortunately, our current board of directors has denied us ALL of these rights. That is one of many reasons why they must be removed.