CLEARLAKE
Clearlake files lawsuit against Highlands Mutual Water Company; City takes next step to obtain records and secure new (legal) election
After repeated issues by existing shareholders within Highlands Mutual Water Company’s service area and Highlands’ challenges in to providing service for certain development projects, the City of Clearlake became concerned about the ability of Highlands to provide reliable drinking water and fire flow protection. Highlands refused many requests to supply the City with records, despite the City being the largest shareholder in its service territory and having a legal right to the records under the CA Mutual Water Company Open Meeting Act and CA Corporations Code section 1600 et seq.
Today, as a follow up to an April 10, 2024, demand letter, the City filed a lawsuit in the Superior Court of the State of California, County of Lake, about the following:
• election of directors at the April 10, 2024, annual shareholders meeting was invalid (directors were not properly elected as directors) so the defendant directors (board seated April 10, 2024) are not entitled to serve as directors at Highlands; the lawsuit includes an injunction against all director defendants acting as directors or exercising any of the powers conferred on directors of Highlands
• demand for a new, properly noticed, election where each shareholder gets a vote and each vote is counted • inspection of corporate records including copies of accounting books, records, and all shareholder and director meeting minutes, including any reports prepared by or on behalf of Highlands related to the condition of Highlands’ water system and its vulnerability to service interruptions
• Highlands’ record of shareholder names, addresses, and shareholdings including the document referred to in Article IV, Section 8 of the Bylaws as the share register
“Concerns from shareholders, coupled with our own observation of poor fire flow, drinking water delivery, and Highland’s inability to serve new development, prompted us to take a closer look,” said Mayor David Claffey. “The more we delved into Highland’ operations, the more we were obstructed. City representatives were blocked from meetings or refused information, and a demand letter sent in mid-April was largely ignored. The council believes more transparency is needed and felt we had no other course of action than to file a lawsuit on behalf of the public.”
Some examples of the City’s concerns about Highlands includes:
• Mismanagement of Highlands’ system by Highlands’ board since Highlands’ water has repeatedly exceeded minimum levels of haloacetic acids according to the State Water Resources Control Board several times in recent years. While this has been partially explained as a one-time event, in fact, it has been an ongoing problem over a five-year period. This is a concern since long-term exposure to haloacetic acids can cause severe health impacts.
• A proposed, much-needed medical clinic in Highlands’ service area was not able to meet Fire Department requirements due to Highlands’ inability to provide adequate service. With the City’s intervention and investment in Highland’s undersized infrastructure, the facility was completed and became operational in 2023.
• A development that includes a popular fast casual food chain has been halted by the requirement of Highlands to include large sections of their system that has been undersized for many years. Highlands should be working with the developer to identify a path for a successful project.
• Rates already considered to be “high risk” for affordability by the State Water Board were raised behind a locked door on March 27, 2024, with no direct notice to shareholders.
Clearlake has developed a section on their website about the water service within the City and what they’ve learned about Highlands and will keep it updated as they obtain additional documents and reports.
—Submitted
LOS ANGELES
Foundation mourns death of Civil Rights Movement champion
AIDS Healthcare Foundation (AHF) mourns the death of Reverend James Lawson, Jr., a champion in the Civil Rights Movement and advisor to Reverend Martin Luther King, Jr. Lawson, 95, passed away Sunday in Los Angeles after a brief illness.
“Reverend Lawson was an icon in the African American community. While the Senior Pastor at Holman United Methodist Church, I collaborated with members of the church’s HIV/AIDS Ministry for decades focusing on HIV primary prevention,” said Cynthia Davis, AHF Board Secretary. “Reverend Lawson was an advocate for the underserved. His legacy of commitment to social justice lives on. We extend sympathy to his family.”
Lawson was longtime pastor at Holman United Methodist Church in the West Adams District in South Los Angeles. He also worked as a labor movement organizer and university professor.
“James Lawson was a lion of the civil rights movement,” said Michael Weinstein, AHF President. “His vision expanded to embrace and confront discrimination of all kinds.”
Submitted
