2016 Shareholders Meeting

Las Positas Mutual Water Company

Minutes of the Annual Shareholders' Meeting June 25, 2016 Held at the Fellowship Hall of the First Baptist Church, 949 Veronica Spring Road (Prepared by Dan Higgins, Secretary)

At 7:05 PM, Director Rick Donovan announced that a quorum of shares were represented, with 429 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 2015 Shareholders Meeting were available for review. Shareholders were given a short time 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 $366,337. Alice also reported that Account Receivable were $4616. She noted that 2 customers were slightly behind on their bills. Alice also reviewed operational expenses, comparing this year to the year before. She reported that last year's redistribution of charge allocations between operational expenses and long term capital improvement funds had worked out well, with charges for operations covering everyday operational costs. She also noted that operational expenses had actually decreased in the past year. This decrease was attributed to a reduction in the amount of water used and fewer problems with the well and distribution system that required repair. Alice indicated that there was no indication that the current billing system needed to be revised.

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, while the static level may have decreased slightly to the 35-40 feet range. Thus, the LPMWC water source appears remarkably stable considering the current drought. (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 slowly. The electrical panel that holds a variety of updated controls for the new dual pressure tank system is basically complete. 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 a week or so during installation. Shareholders will be notified prior to the change over to Goleta water, and are asked to minimize water use as much as possible during that time because Goleta water has become even more expensive due to the drought.

Jeff indicated that the installation of 4-10 water meters discussed at that year's Shareholders Meeting has yet to occur, primarily due to Board members being busy with other non water company projects. We have looked at various types of meters, ranging from inexpensive mechanical meters to much more expensive electronic meters that can be remotely read. Dan Higgins indicated that the mechanical meter installed at his property has apparently functioned well over that 4-5 years that it has been installed (despite the worry that sediment in our water might clog the meter). Unfortunately, that particular model of meter is no longer being manufactured. John Holehouse has been in touch with a plumber for a bid for installation. He indicated that he was scheduled to meet with the plumber the day after the Shareholders Meeting.

Dan Higgins then presented a handout of a bar chart showing the monthly water use of our system (measured at the well site and scaled to the average per parcel per day for each month) for the calendar years of 2013 to 2015 and the first 6 months of 2016. For the calendar year of 2013 the average daily usage was 1122 gallons/parcel/day, for 2014 it was 964 gallons/parcel/day, and for 2015 it was 869 gallons/parcel/day. The average for the first 5 months of 2016 was only 619 gallons/parcel/day, but that average did not include the high use summer months. It was noted that customers have, on average, done a fairly good job of reducing water usage during the drought. However, our average usage per parcel is still very high compared to the smaller lots of Santa Barbara and Goleta.

A second graph on the handout compared LPMWC water costs for a typical parcel with what it would cost for an average daily usage of 800 gallons/parcel/day/ under other water companies. This usage would cost $1651 per quarter under Santa Barbara rates, $780 per quarter under Goleta Water rates, and $255 dollars under LPMWC rates. It was noted that the very large comparative bills for Santa Barbara and Goleta water companies are due to the large amounts of water used on average by LPMWC customers and the very high rates Santa Barbara and Goleta water companies are planning to charge for high usage due to the drought. (Rates use were those published for residential use starting in July 2016.) Dan noted that the Santa Barbara and Goleta charges would be much closer to LPMWC charges if we used amounts of water similar to those used in Santa Barbara (which has much smaller smaller areas for land per residence).

John Holehouse presented a discussion of New Business. The primary issue discussed was the preliminary small number of water meters that we hope to install in the near future. It was emphasized that that no change in the current billing is planned as the result of installing these meters

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 again very low this year, and although there is currently sufficient water supply, we should be careful and not waste a valuable asset (especially since we saw little relief from the drought this past winter "rainy season").

Copies of the yearly Water Quality Report were distributed at the meeting. Results reported were consistent with those of past years.

Jeff Childers then 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 unanimously.

The meeting was adjourned at 8:15PM.