The board never complies with the provision of the Mutual Water Company Open Meeting Act (“MWCOMA”) that “any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to” shareholders. The board meeting agendas available to shareholders have a separate part for Executive Session at the end, typically listing pending litigation or a new professional services agreement, but we are never told what was actually discussed or in general terms what actions were taken. That violates MWCOMA.
By law most of what comes before Crestview’s board must be discussed and acted upon only in a meeting open to shareholders. The only matters that may be taken to executive session are–
- Litigation,
- Formation of contracts with third parties,
- Shareholder discipline,
- Personnel matters, and
- At a shareholder’s request, to discuss a fine, penalty, or payment of an assessment.
These exceptions obviously do not include the discussion of future directions of the Company, which was on the board’s September 29, 2021 agenda. Twenty shareholders showed up to this meeting, probably more than have ever attended any previous board meeting, presumably because they were keenly interested in this topic. However, president Sol Chooljian shut down the discussion after three questions by director Alma Quezada and took it to what he called a “smaller audience” in executive session. That was totally improper. Were there important disagreements we should know about, or did the president also shut down all discussion in executive session too? Will the issue be back on the agenda for a future regular session of the board? Was any other action taken? All of that should have been reported in the minutes approved at the October 28 meeting, but was not.
It was bad behavior like this in the City of Maywood that caused the legislature to adopt MWCOMA in 2013. How do we know the Crestview board knows their actions are illegal? For one thing, the Company’s general counsel has attended every board meeting for the last several years, and he has referred to the MWCOMA. Also, this is part of a pattern of secretive behavior. At the November 10, 2020 shareholders’ meeting, a shareholder asked if director candidates would make their personal contact information available to shareholders. Mr. Chooljian said no director is permitted to do so without a decision by the board–and that he would require the decision be unanimous! Of course he knows that no law or bylaw requires board unanimity on any question. That is just his way of intimidating other directors and depriving shareholders of legitimate access. Mr. Chooljian even said that no individual director has authority to have any contacts with shareholders outside of the monthly board meetings! The board should adopt a resolution repudiating all these secretive policies and behaviors.
Incredible brazen actions by the Board. This is why the inane decision to buy property for a future well when clearly zoning does not allow for. No oversight leads to poor and self serving decisions.
My husband and I bought our Las Posas Estates home in mid-2017, we were not given all the documents that the law says we should get as new shareholders, and the secretive nature of Crestview’s board was apparent to us before the end of our first year as Crestview shareholders. I find it extremely disturbing! If the shareholders are hit with a big rate increase, it will be because of how the board has operated in the past decade, with no real oversight. I would go so far as to say the board has actively tried to keep shareholders in the dark. Their words, “we welcome shareholder’s participation and input”, means nothing up against their actual actions and attempts to intimidate. The first annual shareholder’s meeting I went to, the gentleman who was president at that time, was visibly agitated and angry because shareholders dared to question how some things were being done. There is a definite communication and trust issue between the Crestview board and many of the shareholders.