GM Robert Eranio reported five independent election inspectors have submitted proposals ranging from $3,900 to $12,500. He could not recommend a winner because he has not had time to vet and compare. To avoid delay, he asked for authority to commit up to $12,500 to hire one. All directors got involved in an informative discussion.
Except for Crestview’s use of an independent inspector last year, it was reported all local water companies have staff run their elections. The Board mentioned three reasons for switching to professional independent inspectors. First, when recent elections were contested, shareholders expressed concerns about potential staff bias in favor of incumbents. Second, at least two Board members have privacy-based concerns about insiders or other shareholders seeing who voted for whom. Third, shareholders raised concerns that the “independent” inspector used last year was unqualified and that Staff and Crestview’s lawyers were so involved that he was not really independent.
GM Eranio advised that in his work as inspector—compiling proxies and ballots, determining if any have been superseded or are invalid, and posting votes to a spreadsheet—he necessarily sees who votes for whom. The process would be the same for an independent inspector. Director Chooljian commented that an independent inspector’s work would have to be audited by staff to make sure it was done properly.
Another Director asked who would audit the work in a Staff-run election, and the answer was Nobody. Since, the process takes 40-45 hours, it is not practical for volunteer shareholders to “look over Staff’s shoulder” during the count. Although individual shareholders can go to the office and see how their own proxies and ballots were counted, they will be allowed to see how other shareholders voted, or to see proxies or ballots that were not counted.
In past years, when Staff counted the proxies and ballots, it took 40-45 hours, which cost Crestview about $6,000. If the costs of mailings are added, the total is about $7,000. Director Chooljian moved that the GM’s authority to hire an independent inspector be limited to $7,500. The motion passed 4-1. President Mezzatesta voted No because he thought the authority should be $12,500 as requested by Staff. In the end, increased election integrity and privacy were valued at $500.
There is no flexibility in the resolution. Either the President and GM will accept an independent proposal for $7,500 or less and sign a contract, or the matter will have to go back to the Board because there is no authority for Staff to conduct the election. Thus, the date of the Annual Meeting is still uncertain.
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