2011 Shareholders’ Meeting

Las Positas Mutual Water Company

Minutes of the Annual Shareholders' Meeting

June 14, 2011

Held at the First Baptist Church – Fellowship Hall

949 Veronica Spring Road

(Prepared by Dan Higgins, Secretary )

At 7:10PM, President Jeff Childers called the meeting to order. He called on Director Rick Donovan to confirm that the necessary quorum was represented. Rick announced that 410 share were represented.

The Board of Directors then introduced themselves and any new shareholders were also asked to introduce themselves. Several new shareholders did introduce themselves and indicate where they lived.

LPMWC Secretary, Dan Higgins, was then asked to present the minutes of last years shareholders meeting. He noted that copies of the minutes from the 2010 Shareholders’ Meeting were available as handouts and asked for Shareholders to review those minutes for accuracy and completeness. It was moved and seconded that the minutes be approved and the motion passed unanimously.

Treasurer Alice Donovan then presented the Financial Report. The Balance Sheet as of June 13, 2010 showed $255,963 in the Money Market Checking account (Special Assessment account), $10,006 in the Regular Checking account, and $3,041 in the Savings account, for a total of $269,010. Alice discussed various details of the Balance Sheet and the Profit & Loss statements, copies of which were distributed as shareholders entered. It was noted that no shareholders payments were currently delinquent. It was also pointed out that various operational expenses (e.g. Goleta water, electricity, and chlorine costs) are increasing. After a brief discussion, it was moved and seconded that the Treasurer’s report be accepted. The motion was unanimously approved.

The next item discussed was status of any bills owed to our former well operator, Lawrence Price. Secretary Dan Higgins reminded the shareholders that Lawrence had been fired almost a year ago for failure to send bills for various additional tasks carried out for LPMWC despite being urged to do so many times over a period of years. A letter was sent to Lawrence requesting that he submit all bills owed along with documentation supporting any charges. In the past year he has failed to submit a single bill! The Board of Directors is awaiting a response before any further action.

Jeff Childers then introduced our current well operator, Mike Stephens, and noted that Mike had completed a number of deferred maintenance tasks since he started working for LPMWC about a year ago (and that Mike’s billing for all his work has been prompt and well documented).

Mike then presented a summary of some of the tasks he has completed as Facilities Manager, in addition to every day well maintenance. One has been more frequent flushing of the water mains, including using the Goleta water hookup to increase pressure to get cleaner lines. He also installed a new chlorinator system that allows LPMWC to keep a small residual of chlorine in the distribution lines, and replaced the broken meter for measuring well water production. He has also cleaned all the storage tanks and supervised the correction of several electrical problems that occurred at the well site. He noted that the electrical system at the well site is quite old. He is working with Jeff Childers to plan an update to various parts of this system in the next year. He also discussed the need for a new backup pressure tank pump.

The next item of business was the election of the Board of Directors. Nominations were called for and it was moved that the current Board be re-elected. No other nominations were made. That motion was seconded and unanimously approved. The elected Board members are Jeff Childers, Rick Donovan, John Holehouse, Dan Higgins, and Layne Wheeler.

Dan Higgins then presented a comparison of LPMWC water costs with other local water suppliers. It was first noted that due to a broken meter at the well site, we really don’t know exactly how much total water was used last year. (We now have a working meter that will provide that information.) From previous years, the total water used was approximately 20 million gallons for the entire year. Averaged over the year and parcels, that is the equivalent of 830 gallons per parcel per day. Santa Barbara and Goleta report average residential use of roughly 300 gallons per day, but it was noted that since all our parcels are an acre or larger, an increased use of water for landscaping is expected. Using the 830 gallons per day and the recently increased rates for Santa Barbara and Goleta, quarterly charges for water would be $598 in Goleta, $579 in Santa Barbara, and $355 for an average parcel served by LPMWC.

The final item of business was a discussion of the continuation of the Special Assessment. President Jeff Childers noted that our water costs are still quite low compared to what we would be paying under Goleta or Santa Barbara water districts. Our current rate per quarter is $100 per parcel, plus $2.50 per share (average of 12 shares per parcel), plus $225 special assessment per parcel. This gives an average cost of $355 per parcel per quarter. The special assessment has traditionally been designed for capital improvements to the water system like new mains or new storage tanks. As indicated in the Treasurer’s report, LPMWC has now accumulated over $250,000 in our Special Assessment account. Jeff indicated that the Board believes that we currently have sufficient funds for a new well, electrical control system improvements, booster pump replacement, and other near-term contingencies. As a result, the Board recommended that the Special Assessment be reduced from $225 per quarter to $125 per quarter. Rick Donovan added that the Board recognized that normal operational expenses were increasing and it may be necessary to increase other parts of our assessment (connection and per share fees) at some point, but that the Board is authorized by the By-laws to do so as needed. The Board will evaluate expenses and perhaps need to raise these other fees sometime during the next year, but will keep any increases to the minimum needed amount.

A continuation of the Special Assessment at $125 per quarter for one year was proposed, seconded, and unanimously approved.

The question was then brought up from the floor of whether the water company could supply water in the event of a major emergency (like a large earthquake) that would shut off power. It was noted that our backup is to use the Goleta Water Company connection, but that if Goleta Water is also shut down, water could not be pumped. It was pointed out that it would be unlikely that both Goleta water and electricity at the well site would be off-line for an extended time in such an emergency. Nevertheless, it was suggested that an emergency generator at the well site would be useful in such an emergency.

It was moved, seconded, and approved that the Board should investigate the cost of some emergency response equipment to handle loss of power and the Goleta Water hookup service.

The meeting was adjourned at about 8:40PM.