Canal board, shareholders reach stalemate

Facing the threat of significant increases in the cost of their irrigation water, the shareholders of the Shell Canal Company rallied against their board Monday night, packing the small meeting room of the Greybull Public Library to a point that would make a fire marshal cringe.

Either in person or by proxy, 99.1% of the canal company’s total shares (3,808.09 out of 3,842.55) were represented in the first of two votes taken during the special meeting, which centered on the canal company’s 2025 budget and various approaches to funding it.

Neither vote — the first to take the board’s three preferred options completely off the table, the second to support a shareholder-backed plan presented by Andy Melin — received the required two-thirds for passage, however. 

The night ended with Chairman Ken Rempel declaring a stalemate and saying another meeting would be needed. It will have to be, as the canal company, as of Tuesday, was down to about $18,000 in CDs and $20,000 in its checking account.

Meanwhile, water is expected to be released into the canal toward the end of next week and reach the last of its 141 shareholders in and behind the Heights early the week of April 20-26 before emptying into the Big Horn River.

Proposals

The canal board, consisting of Rempel, Boyd Van Fleet, Barbara Burbridge, Thomas Loewen and Robert Shannon, had previously detailed two options to fund the budget. Last year’s, which was set at about $120,000, was funded by an across-the-board, $21 per share assessment of all shareholders.

Citing the lack of money in savings and the need to fund the first phase of Thompson lateral improvements, for which the canal company received a DEQ grant, Rempel proposed a budget of around $180,000 and two options to fund it.

The first called for a new $350 administrative fee on all shareholders coupled with an increase in the per-acre assessment from $21 to $34. This option included a tiered approach for small users, with those owning between 0 and 5.99 acres paying $170 ($520 total with the admin fee included) and those between 6 and 10 paying $340 ($690). 

The second option called for all canal users to pay an administrative fee of $554, along with an assessment increase from $21 to $28.  The $554 represented the cost of overhead, $78,232, equally divided across the 141 shareholders. Rempel tweaked it Monday night to create a third option, removing half the costs associated with the ditch rider, lowering the administrative fee to from $554 to $437 and raising the assessment from $28 to $30.

But none of these options ever made it to a vote.

Melin, who served as the spokesman of the shareholders’ group, presented a fourth, calling simply for an assessment increase from $21 to $23 and for the removal of the Thompson lateral project from the 2025 budget.

“The membership believes that this expenditure is in addition to the budget,” he said, calling for a special meeting too address “the existing and potential future problems with the Thompson lateral, explanation and discussion of all repair options available ... and the most equitable way to fund the repairs.”

On the subject of assessments, Melin and Janet Evans after him leaned on the company’s current bylaws — which, while on the back burner Monday night, are at the forefront of another simmering dispute between the board and the shareholders.

Immediately after Melin’s presentation, Evans called for the three options presented by the board to be declared invalid. “Our bylaws clearly state (the company’s costs) are to be levied in equal assessments upon the outstanding shares of the company,” she said.

Citing another section of the bylaws, Evans added, “You can create categories of assessments based on number of shares, but it can’t be done in an arbitrary or capricious fashion” and they must be approved by shareholders.

“There’s no provision in our bylaws for a flat fee,” she emphasized, adding that the board “has a fiduciary duty to the Shell Canal Company to obey its bylaws.”

Melin added that in any form presented, an assessment would require two-thirds vote to pass.

The spokesman also made the case that small users shouldn’t have to pay as much because they don’t require as much of the ditch rider. The Smith, Grandview, Horsepower and Scharen subdivisions are home to 64 properties, but account for just four of the 62 headgates that require monitoring by the ditch rider.

The largest consumers of water should be the ones paying the most, Melin said, adding, “If you want to reap more, you sow more. It’s not up to your neighbors to sew so you can reap.”

Rempel countered that argument, saying he didn’t believe any of the three proposals from the board were arbitrary or capricious, that the canal company has used small user fees in the past and that small users aren’t paying enough to cover costs.

Rempel said at $21 per assessment, the owners of 302 acres in the Heights and north of U.S. Highway 14 are paying about $7,100, which pales in comparison to the approximately $52,000 in infrastructure (headgates, splitter devices, etc.) that serves them and must be maintained by the company.

“And you think that’s unfair ... I just don’t get it,” Rempel said.

The votes

The first call for a vote came from the floor, with shareholder Don Tranas requesting shareholders to consider whether to declare the board’s three options null and void.  It did not receive two-thirds vote required for passage, with 1,800 of the shares voting yes and 2,008.09 voting no.

Picking up where they left off at the March meeting, shareholders continued to challenge Tom Loewen’s position on the board, which he has maintained despite not appearing on the list of shareholders posted on the company’s website.  

Rempel has said Loewen has water rights and that his name is “in the process” of being added to the list. But referring to the 52% to 48% split, he said, “Even if you take his shares out, it’s still a win for the ‘no’ side.”

The second — and final — vote of the evening was on Melin’s proposal to table the Thompson project and remove it from the budget, increase the assessment to $30 and allow the board to impose a special assessment in the event of an unforeseen ditch maintenance.

A majority of shareholders, 2,154.39 to 1,402 (60.5% to 39.4%), backed Melin’s proposal, but that fell short of the two-thirds requirement.  

By the time the second vote was taken, just after 11 p.m., 251.45 shares had left the building.