Category: News

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, 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

From the company’s own financial records, it looks like the staff is enriching themselves while they drive the company to the brink of bankruptcy.

Over the past 3 years, payroll expenses have increased by 45%, and cash reserves have been reduced by more than 50%. If the trend continues, the company will be bankrupt within the year.

Why is this happening? The general manager and her mother are on the board. The rest of the board is her friends, and the staff consists of many family members. The board has no control of the staff, since the board and staff are pretty much the same.

*Source: 2016 & 2017 990s, 2018 & 2019 shareholder financial statements.

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.

In the latest financial statement release by the Palo Alto Park Mutual Water Company, payroll expenses, including benefits, was over $470,000! The company brought in only $725,000 last year. The office is only open about 16 hours per week. This is WAY too much to pay for staff.

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.

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

In a very strong statement from the State Water Resources Control Board, the Board accuses them of either incompetence or purposeful mismanagement. The company appears to not be correctly montitoring the water, and therefore cannot guarantee the safety of the water.

The full text of the letter is here:

4110020.20180509 O&M of PAPMWC

Dear Property Owner,

As most of you know, we have been working to replace the current management’s board of directorswith homeowners that will manage the Palo Alto Park Mutual Water Company responsibly. Thanks to the many of you who signed our proxies, the San Mateo County Superior Court, at our request, has ordered the company to have a board election. We took this action because current management prevented the shareholders from electing board members at the last shareholder meeting and refused our demand to hold a fair election.

You recently received mailings from the management of the company announcing the shareholder meeting on Tuesday, May 8, 2018, at 10:00 a.m.,and asking you to sign a proxy for them to vote on your behalf to preserve their control of the Company. Many of our neighbors have contacted us with concerns that these mailings were confusing, and that they stated that state funding and resulting customer savings depend on your signing the management’s proxy. Please know, this assertion is NOT true.

A supervisor of the State Water Resources Control Board Division of Drinking Water’s Santa Clara District Office has confirmed that, contrary to what management tells you, the Company is not“in the final stages of obtaining a GRANTfrom the state” to pay for all this long-delayed work.  In fact, NO FUNDShave been awarded for these projects, and the process of getting the grant that management promises could still take another year and a half.  He emphasized that “PAPMWC has not been approved for grant funding,” and that the “statement that they are is premature and possibly wishful thinking.” The company’s lack of maintenance has saddled us all with a 2-million-dollar backlog of undone work and no money to pay for it.

We urge you NOT to sign the management’s proxy, as you will be supporting the people who have created this mess.  Instead, either come to the shareholder meeting and vote yourself, or sign one of our proxies. It’s time for a change.

If you can attend the meeting and vote for change in person, please join us on Tuesday, May 8, at 10:00 a.m.

If you cannot attend the meeting, and you have not given us your proxy already, please join us in voting for change by giving us your proxy.  Download a Proxy sign it and mail it back to us.

Even if you have already signed the company proxy, you can still vote for change by either attending the meeting and voting in person, or signing and returning ourproxy form, making sure that you sign and date the proxy form at least one dayafter the date on which you signed the company proxy.

Neighbors for Better Water

 

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.

Article here