2015 Shareholders Meeting

Las Positas Mutual Water Company

Minutes of the Annual Shareholders' Meeting June 25, 2015 Held at the Fellowship Hall of the First Baptist Church, 949 Veronica Spring Road (Prepared by Dan Higgins, Secretary)

At 7:07 PM, Director Rick Donovan announced that a quorum of shares were represented, with 462 of the 759 total shares present. President Jeff Childers thus called the annual Shareholders Meeting to order. The Board of Directors then introduced themselves. Directors Jeff Childers, Dan Higgins, John Holehouse, Layne Wheeler, and Rick Donovan were present, as was the Treasurer, Alice Donovan. Shareholders in attendance then introduced themselves and stated where they lived.

Secretary Dan Higgins then indicated that printed minutes of the 2014 Shareholders Meering were available for review. Shareholders were given a few minutes to review those minutes (which had been available on the LPMWC website since shortly after last year's meeting). It was moved and seconded to approve the minutes. The vote to approve was unanimous.

Alice Donovan then began discussion of the financial records that were distributed when shareholders entered.  It was reported that the total of current checking and savings accounts for LPMWC totaled $339,461. Alice also reported that Account Receivable were at a reasonable level with no customers more than 90 days behind in paying their bills. She also indicated that LPMWC would change its policy on charging interest to begin 30 days after payment was overdue (from the previous policy to begin after 90 days). Alice also reviewed operational expenses, comparing this year to the year before. She pointed out that last years change to allot more income to operational expenses had had indeed almost eliminated a shortfall in covering such operational costs. Several specific cost items were discussed. One example was a drop is chlorine costs of roughly a factor of 2. Some of this reduction could be attributed to reduced water use. It was noted that we had not had any problems with water quality and Mike Stephans did test the level of chlorine in distributed water and the level had not been changed. After all the discussions, it was moved and seconded to approve the financial report. The vote to approve was passed unanimously.

Jeff Childers then presented a facilities report. Jeff reported that, despite the continuing drought, the water level of our well has remained nearly constant with the level while pumping at about 70-75 feet, and the static level at roughly 30 feet. Thus, the LPMWC water source is remarkably stable. (Of course. there is no guarantee that it will remain that way.)

Jeff also reported that work on the new electrical control system has progressed with a new panel that now holds a variety of updated controls for the new dual pressure tank system. The new pressure pumps are yet to be purchased and installed, and Jeff indicated that we will need to shut down the well and go on Goleta water for about one week during installation. Shareholders will be notified when that happens, and should reduce water use as much as possible during that time because Goleta water has become very expensive due to the drought.

Dan Higgins presented a graph showing the water use of our system (measured at the well site and scaled to the average per parcel per day for each month) for the year of 2013 and the first 6 months of 2015. The data indicates that users are responding to calls to reduce water usage. LPMWC has reduced average usage by 35% in the first 6 months of 2015 compared to 2013. It was noted that our average usage per parcel is still very high compared to the smaller lots of Santa Barbara and Goleta.

Dan Higgins indicated that he has a privately installed meter at the water connection to his property. In 2013, the water usage was about equal to the overall average of a parcel of the LPMWC. He measured the effects of cutting off all water to his lawn and the result was roughly a 50% reduction. Cutting off all watering off outside plants reduced water use by 75%. This is an indication that a large percentage of our water is not used inside our homes, but instead for watering external vegetation.

John Holehouse presented a discussion of New Business. The primary area of discussion was the issue of water meters for individual water hookups. It was noted that the Board had recently discovered that a California State law has existed sinde 2004 that requires "urban water utilities to meter all municipal and industrial users by 2025 and charge metered customers based on the actual volume of water delivered". In other words, LPMWC is required by law to install and use meters by 2025. It was reported that the Board of Directors had discussed this issue during its meetings this past year and decided to install 10 water meters into the system at hookup boxes. The purpose was to get some experience in choosing the proper equipment, finding problem in installation and operation, and finding out how usage varies between parcels. Directors agreed to install 5 of these meters on their connections to the LPMWC mains and choose locations for the others randomly. No changes in current billing was planned based on these meters.

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 projected costs for an ‘average’ LPMWC parcel, if billed using planned 2015 rates for Santa Barbara and 2014 rates for Goleta Water District . The comparison was based on assumed usage of about 725 gallons per day per parcel, averaged over the year. Santa Barbara rates would result in a bill of about $1200 per quarter, Goleta rates would produce a bill of $660, while the LPMWC rate is $255 ! The drought is clearly driving water prices quite high for Santa Barbara and Goleta customers, while so far LPMWC has avoided this problem.

Layne Wheeler talked briefly about a continued need to conserve our water. Leaking pipes, toilets, or faucets should be fixed. Lawns and other plants should not be overwatered, allowing water to run down streets. It was noted that rainfall was very low this year, and although there is currently sufficient water supply, we should be careful and not waste a valuable asset.

The extension of the Special Assessment was then discussed. It was explained that the Special Assessment began a number of years ago in an effort to fund the replacement of the old water mains. It was needed because there had been no effort to accumulate funds for long term capital improvement projects. It has since been used for new mains, the new and larger storage tanks, and the on-going effort to replace electrical controls and the old pressure tank. It also serves to build an reserve fund for unforeseen expenses. The Board recommended that the amount billed for the fund remain unchanged for the next year. It was moved and seconded that the assessment continue for the next year at the current rate and the Board determine a name that would be more meaningful and consistent with our nonprofit status. [One suggestion for a name was “the Capital Improvement and Reserves fund”.] The motion was unanimously approved.

Rick Donovan called for nominations for the election of members of the Board of Directors.  It was then 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 re-elected. It was pointed out that anyone interested in helping the Board would be welcome to be involved in on-line e-mail discussions and attend Board meetings, and shareholders were asked to let Jeff Childers know if interested after the meeting.

The meeting was adjourned at 8:20PM.