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Highlands Mutual Water Co. holds new election, board reelected over challengers
The election, which took place on Monday under the supervision of a court-appointed monitor, resulted in the reelection of Jessica Chernoh, Mark Coats, Kathryn Davis, Robert Kraft and Rachelle Sapeta.
They had been challenged by reform candidates Henry Bornstein, Dennis Darling, Thomas DeWalt, Denise Loustalot and Raymond Silva.
Highlands Mutual reported that the final vote count was 1,083 votes supporting its existing board of directors to 203 votes for the challengers.
The water company called the election results a “landslide win” over the city and the “reform” slate the city put forward.
“We want to thank the entire community of shareholders and supporters who worked tirelessly to ensure the community had accurate and complete information about water services in Clearlake,” said Highlands attorney Tina Wallis.
“Highlands Water Company shareholders sent a loud and clear message about wanting to keep their water services in the hands of the experts,” Wallis added.
“While the reform slate did not succeed, what the community has learned about Highlands’ water system — rates, fire system, grant funding, and expansion policies — has been extremely valuable,” Mayor David Claffey said in response to the election outcome.
Claffey said the election made clear that the city of Clearlake will hold utilities to a higher standard of accountability and transparency moving forward. “The Highlands’ board are stewards of an essential service in our community and, to meet the wants and needs of Clearlake residents, it’s critical to have safe and reliable water infrastructure.”
He added, “Residents especially want more housing, medical offices and retail, and we are working hard to bring them to Clearlake. I’m ready to work with the board to turn the page and build a stronger, more transparent partnership, grounded in fairness, collaboration and a shared vision for a thriving Clearlake.”
The new election was the result of a June lawsuit filed by the city which sought to overturn the election held April 10 during Highlands Mutual’s annual shareholder meeting.
In that election, the city presented 177 proxy votes in an attempt to have the Clearlake City Council elected. However, Highlands Mutual ruled that its existing board had been reelected with 217 votes.
In August, the case went before Lake County Superior Court Judge J. David Markham who, following oral arguments, ruled that Highlands Mutual must hold a new board election.
Markham’s ruling also determined that each lot or parcel within the district was entitled to one share in the company, and that shareholders eligible to vote were not limited only to those who have connections to the system.
That decision resulted in a new election being set for Sept. 12. However, on Sept. 5, the city sought a temporary restraining order against Highlands Mutual to stop the election until after the court had determined the correct identities of each Highlands Mutual shareholder entitled to vote in the shareholder election and a special referee had been appointed.
At that time, Flora confirmed to Lake County News that the city had taken the action because it didn't trust Highlands Mutual to accurately determine the shareholders entitled to vote for the board.
In the intervening time, the “Reform Highlands” candidates came forward to run for board seats.
The candidates are well-known community members and business owners who said they are concerned about how the district is being run.
Late last week the county of Lake issued a meeting notice for the Lake County Board of Supervisors, which had been set to hold a meeting at 8:30 a.m. Monday to determine if they would cast votes on behalf of county-owned parcels in the Highlands Mutual coverage area. However, that meeting didn’t end up taking place.
As for what’s next, Claffey said in the Wednesday issue of “Clearlake Express,” the city’s newsletter, “A strong, reliable infrastructure is required to realize further growth and I remain committed to providing that for our city. For now, that means building a stronger, more transparent partnership with the elected Highlands Water board, grounded in fairness, collaboration, and a shared vision for a thriving Clearlake.”
Claffey added, “I’m ready to work with this properly elected board to turn the page and I am optimistic they will consider the concerns raised by their shareholders, including the city of Clearlake.”
Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it.. Follow her on Twitter, @ERLarson, or Lake County News, @LakeCoNews.
