2012 Shareholders’ Meeting

Las Positas Mutual Water Company

Minutes of the Annual Shareholders' Meeting

June 13, 2012

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 455.5 shares were represented out of 759.5 total shares.

The Board of Directors then introduced themselves. Directors Jeff Childers, Dan Higgins, and Rick Donovan were present at the beginning of the meeting, as was the Treasurer, Alice Donovan. Director John Holehouse was delayed and arrived later. Director Layne Wheeler was out of town. No new shareholders were present.

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 2011 Shareholders’ Meeting were made  available as handouts as shareholders entered and asked for Shareholders to review those minutes for accuracy and completeness. He also reminded shareholders that minutes of past meetings are available on the Water Company web site (www.lpmwc.com or www.lpmwc.org). 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 10, 2012 showed $292,195 in the Money Market Checking account (Special Assessment account), $203 in the Regular Checking account, and $10,027 in the Savings account, for a total of $302,415. Alice discussed various details of the Balance Sheet and the Profit & Loss statements, copies of which were distributed as shareholders entered. It was also pointed out that various operational expenses, especially consulting fees and chlorine costs, are increasing. Alice explained the “consulting fees” category is basically just the bills of our Well Operator, Mike Stephens, who billing us promptly for all work, as expected. Chlorine costs are also being billed promptly, and we have deliberately increased chlorine levels for better water treatment. After a brief discussion, it was moved and seconded that the Treasurer’s report be accepted. The motion was unanimously approved.

Jeff Childers then delivered a report on Water Company facilities. He indicated that work on new pressure pump system was underway but progress was slower than had been expected. He indicated that he hoped that the pressure pump replacement along with a new well would be completed by next year’s Shareholders Meeting.

It was asked if the question of an emergency power generator that had been raised last year had been investigated. Dan Higgins answered that the Board had looked at the issue. It appears that a fairly large generator (25 KW or greater) would apparently be needed and the cost would be in the range of $15-$20K. The generator would probably be propane powered. Apparently, there are many permitting issues related to air pollution regulations involved in installing a permanent generator of the size needed. The Board decided that such a generator is not currently a high priority compared to expenditures needed just to keep the existing system running.

A solar power system had also considered briefly. It was estimated that a photovoltaic system big enough to meet our needs would currently cost about $100K. However, current electric rates paid by LPMWC are low compared to residential rates. It thus seems not advisable to cosider a solar power system further at this time.

It was asked if it was possible to simply draw water from our tanks if some major emergency disabled all local power for an extended period. The answer was yes, there is a tap on the tanks that could be used as an emergency supply of water that is in the tanks, even if we could not pump any water out of the ground or through the system.

It was noted that the water mains were now being flushed more frequently (every 2 months) in an attempt to improve water quality. One customer reported not getting a flushing notice until after the flushing occurred. How this occurred is not clear since notices have been placed in mail boxes the weekend before the flushing. Another customer reported that he does not regularly check his mail box. An e-mail signup list was available, and Dan Higgins indicated that the Company would attempt to send notices out by email in the future.

It was also noted that there had be a break in the lines at a flushing location near the corner of La Senda and La Entrada. Flushing the local line after the repair had apparently flushed some dirty water into some customers lines. The Company had not notified anyone of this flushing because it was a totally unexpected emergency. LPMWC will try to notify customers of such repairs in the future if at all possible.

Several shareholders indicated that they still have problems with sediment in there water. It was pointed out that the black sediment is probably due to the high level of manganese in our water. It was asked if we could buy filtration filters in bulk for various individual systems, but it was noted that different households use different filtration systems, making this very difficult. It was also asked if filtration at the well site was feasible. It was pointed out that this had been considered in the past but was found to be quite expensive with particular problems in how to handle disposal of filtration products (e.g. filtration sand or water used for back-flushing to clean filters).

Rick Donovan called for nominations for the election of members of the Board of Directors. It was noted that the Board o LPMWC has 5 members and the President is the chosen by the Board. It was moved that the current Board be re-elected. No other nominations were received, and the current Board members (Jeff Childers, Dan Higgins, John Holehouse, Rick Donovan, and Layne Wheeler) were unanimously re-elected.

Dan Higgins reported on a comparison of LPMWC water costs with those of the city of Santa Barbara and the Goleta Water District. He displayed a chart showing LPMWC costs for an ‘average’ parcel are less than 50% what the charges would be in Santa Barbara or Goleta. The comparison was based on the total water pumped from the well site last year (roughly 17 million gallons), which corresponds to about 725 gallons per day per parcel, averaged over the year. It was noted that our average usage is high compared to smaller residential properties in Santa Barbara or Goleta and this is probably due to additional gardening/agricultural irrigation. It was noted that the comparison chart would be placed on the LPMWC web site.

The extension of the Special Assessment was then discussed. Jeff Childers reported that the Board recommended the assessment be continued at its current rate of $125 per quarter per parcel. The basic reason was that even though we have a large amount of money already accumulated, that it is believed that we will be spending that money at a high rate over the next year as new equipment and a new well are actually purchased and installed. Additional accumulation of funds for capital improvement thus seems prudent, especially since our current water charges are quite low compared to other water companies. Various issues concerning the Special Assessment were discussed. It was moved to keep the assessment unchanged for one year. The motion passed with all approving except for a single ‘No’ vote.

A question was asked about the status of any billing from former water system operator. It was reported that no contact had been made by Lawrence Price and that no additional billings had been received in the past 2 years.

Jeff Childers reported that there had been an isolated incident where one customer had been quite rude in reporting a water problem. He asked that everyone remember that water company directors and officers are unpaid volunteers who are just local residents and also water company customers.

It was noted from the floor that the efforts of water company directors/officers are greatly appreciated. It was suggested that perhaps some financial reward, perhaps in the form of reduced water rate should be given to unpaid company officers. The idea was briefly discussed and it was suggested that it be further considered at next years meeting.

The meeting was adjourned at about 8:10PM.