Will the board opt for an open election process this year or again block effective shareholder involvement?

Shareholders should weigh in on whether directors should hand pick their successors this year or hold an open election.  Everyone who has been a director in the 21st century has been appointed by the board to fill a vacancy created by a director’s resignation.  However, there have been signs in recent months that the board is considering an open election process this year.  In an open election, directors not committed to serving another full year would resign before the election, and volunteers would run to fill the vacant seats.  The shareholders, not the retiring directors, would chose who will manage our company.

The three senior directors are in their mid-80s and have been on the board from 8 to 26 years. All three are fully responsible for the decisions to waste $884,607 on the Well #7 debacle, to expose us to millions of dollars of cost overruns on Well #8, to delay lowering the pump in Well #4 for years after they knew it was necessary and feasible, and to routinely violate the Mutual Water Company Open Meeting Act and other proper governance procedures.  All three have indicated their intentions to retire from the board in the near future.

Doug Off and Roger Whitlock are the nominating committee, and president Sol Chooljian has a veto power over director nominations.  The two newest directors, Alma Quezada and Laurie Bennett, are apparently excluded from the process of selecting replacement directors with whom only they will work.  They will also be excluded by the draft form of proxy from discretionary decisions about how shareholders’ proxies are voted.  All that authority is given to Chooljian and Whitlock–unlike last year when the whole board made those decisions.

If there is not an open election, there will be at least the appearance that departing directors have chosen successors who will follow legacy policies and not reconsider prior decisions. That would do no good for the reputations of the departing directors, their replacements, or other directors supporting this closed, self-perpetuating process.

The three directors should resign before the next election, and there should be an open election to fill their seats. Let the shareholders—not the departing directors—pick our board.  Concerned shareholders should Zoom into the May 26 board meeting at 4 p.m. to express their views. Contact the Crestview office for login information.

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