Finances
While the president and bookkeeper attempted to give a rosy picture of the state of the Company, many of us pointed out that the finances are such a mess that there is no real way to tell. The financial statement had a basic accounting error in the amount of over $93,000 which nobody could explain. It also had an adjustment of over $150,000 from the prior year which the bookkeeper said was related to a billing error. Many members asked for an audit, and I pointed out that the bylaws require an annual review by an outside accountant, which is not being done. The Company gave no assurances that an audit or review would be done, and they used the proxies that members signed for them to approve the treasurer’s report, despite the errors.
The Company also declared that they are going to continue raising water rates and will be installing meters at all the houses.
Election
Instead of electing the two people listed on their proxies, the Company declared they were electing two other people that were not on any of their proxies, people that had not campaigned.
We have followed up with the Company to ask for documents and accounting information to research more about the election and the finances. More detailed notes are below.
Notes on the Annual Meeting
The Company announced the following totals for proxy votes:
– Company: 571.51
– Neighbors for Better Water: 191.58
Note: We believe our total was over 300. We are still waiting to hear back from them on why they discounted so many of our votes. We also protested earlier that 2 out of the 3 vote counters were the same ones that were found to have wrongly canceled votes in 2019.
Minutes
We tried to correct the minutes from last meeting because they did not show that the Company had lost our lawsuit against them for the 2019 election. They used their proxy votes to prevent that correction.
Treasurer’s Report
Eva Bruner, the bookkeeper, gave the treasurer’s report. (Eva is not the treasurer, Niambi Lincoln is the treasurer). She stated:
– The Company broke even
– Water rates were going to increase
– Meters are going to be installed on all houses within the next 7 years per state law
– The Company is receiving a grant of technical assistance from the state
– The Company received funds for Covid relief for specific customers
Questions from the audience were asked:
– Shannon Pekary asked why the financial statement has a basic accounting error in it, that the starting retained earnings for this year did not match the ending retained earnings from last year, by $93,000! Ms. Bruner said she didn’t know.
– Ms. Lincoln was asked why the phone bill was over $25,000 for such a small company, and whether board members were receiving phones. She stated that the phones were special, that they needed to be on all the time, have video chat and picture taking capabilities (like a standard cell phone). She did not answer the question on who was receiving company phones.
– Delphine Hill asked when the last financial review or audit had been done. Ms. Bruner answered that one had not been done since 2017 when she started as the bookkeeper. Ms. Bruner and Fidel Alas said later the cost for an audit would be $20,000 and they would have to figure out how to raise that money.
– Carlos Romero asked why the allowance for doubtful accounts went from $230,000 in 2023 to $75,000 in 2024. Ms. Bruner said it was a billing error.
The board asked for a vote to approve the Treasurer’s report.
Shannon Pekary voted his proxies against approval, because:
– The financial statement was obviously flawed and appears to show over $93,000 unaccounted for.
– The Bylaws require an annual financial review by an outside accountant, and that is not being done.
– Niambi Lincoln is the treasurer and the general manager, a violation of good governance practices and separation of duties.
Niambi Lincoln voted her proxies to approve the treasurer’s report anyway.
Board Election
The Company announced that their two candidates for board were withdrawing from the election, and that they were going to elect two other people: Sharifa Wilson and Barbara Jacobs.
The candidates were allowed to make statements and questions were asked of the candidates. During this time, Niambi argued that the wells are not failing, but Shannon stated that according to the state water board, the wells ARE failing.
The Company voted 355.37 votes for the new candidates, and Neighbors voted 191.58 for Shannon Pekary and Ramiro Macias.
President’s Report
Mr. Alas gave the president’s report on the Company. He said that the Company offices are still closed due to Covid and meetings have to be by appointment, though they hope to open the office this year.
Shannon Pekary asked how he can give such a rosy picture about the Company when the financial statement is a mess, the Company is under an enforcement action from the state water board, the governance is horrible, the bylaws are not followed, and we have failing wells. Out of 150 water systems in the South Bay Area serving more than 500 people,ours is the only one shown as failing.
Open Comment
Shannon Pekary said that the Company had finally reduced his bill to the correct amount after winning multiple lawsuits in small claims court. He also asked to attend the board meetings of the Company, which he has a right to do according to state law.
Delphine Hill said that the state water board expressed that they are having difficulty with the management of the Company.
April Pekary stated she would like to get answers to the questions on the financial statement. Niambi Lincoln said she could set up an appointment later.
Ms. Rose asked for a financial report from Neighbors for Better Water. Shannon later stated she could contact him at neighborsfbw@gmail.com to get answers to questions.
Annie Jenkins, Syrtiller Kabat and Elvira Macias all asked for an audit.
Niambi Lincoln stated she was happy the Company will be receiving technical assistance from the state.
Meeting Adjourned