Resident alleges city attempted to influence Highlands Water Company proxy vote; council offered no immediate response

During the public-comment period at the May 2 Clear Lake City Council meeting, resident Michael Graves accused city officials of attempting to seize control of the Highlands Water Company board through proxy voting.

Graves, a longtime Clear Lake resident and water-treatment operator, told the council that at the company's annual proxy vote on April 10 he observed what he described as a coordinated city effort. "You came in force with 2 attorneys and other city officials, 3 city council members, and a few supporters. You did your own proxy vote. You came in with a total of 177 votes. Of those, only 85 were legitimate. The other 92 votes came from properties that have no shares in the Highlands Water Company," Graves said, adding that he believed the action amounted to intimidation and an attempt to force a change in the board.

He said he feared the city sought revenue and warned that control of the water company could lead to rate increases: "If you get a hold of the board of directors, you can start doing things, like moving water lines, at a reduced rate that would fall back on the rate payers... I believe the rate payers, the money that they pay every month would skyrocket." Graves also said he expected the election would be challenged in court.

The council did not respond substantively during public comment; staff later moved forward with the agenda. No formal inquiry, staff report or denial from city officials appears in the meeting transcript. The accusation was presented as an individual resident's claim and remains unresolved in the record.