Minutes of 2017 Shareholders’ Meeting

(Prepared by Dan Higgins, Secretary)

The Annual Shareholders' Meeting of the Las Positas Mutual Water Company was held at the Fellowship Hall of the First Baptist Church, 949 Veronica Spring Road on June 14, 2017 (Minutes prepared by Dan Higgins, Secretary)

At 7:10 PM, Director Rick Donovan announced that a quorum of shares were represented, with 384.5 shares represented and 380.5 needed for a quorum. 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 2016 Shareholders Meeting were available for review and had been distributed as shareholders entered. Shareholders were given a short time to review those minutes (which had also been available on the LPMWC website). It was moved and seconded to approve the minutes. The vote to approve was unanimous.

Alice Donovan then began discussion of the financial report that were distributed when shareholders entered.  It was reported that the total of current checking and savings accounts for LPMWC totaled $385,755 as of June 11. She also indicated that a number of bills from the recent pressure pump replacement project had not yet been received, making this number somewhat deceptively high. Alice also reported that only one customers were slightly behind on their bills.  

Alice also reviewed operational expenses, comparing this year to the year before. Alice reported that expenses were slightly lower than the previous year, due primarily to the lower water consumption (driven by water conservation and the increased rain this past winter).  She also indicated that the distribution of charge allocation between daily operations and funds for long term capital improvements seemed to be reasonably well balanced this past year. It was moved and seconded to approve the financial report. The vote to approve was unanimous.

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 65 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.) It was noted that this years winter’s storms seemed to have little effect on the well water level

Jeff than presented a summary of the entire well and system and the newly replaced water pressure parts of the system.

First of all. LPMWC has a well shaft that is roughly 250 feet deep. The well pump is about 150 feet down the shaft and it pumps water up to the large storage tanks which were installed a few years back.. The water in the tanks is then pumped by a pressure pump into a pressure tank which feeds the distribution system and provide pressurized water for customers.

Jeff displayed some large posters showing the old pressure pump/tank system, which was probably installed somewhere in the 1940s (and was clearly showing its age and clearly in need of repair).

Jeff then showed some large posters of the newly installed pressure pump system which contains new dual pumps with stainless steel rotors. In normal usage, the two pumps will alternate and provide backup if one should fail and higher pressures when needed (e.g. for main flushing).

Jeff also displayed some photos of the completely new electrical control system for the new pressure pump system. Jeff also indicated the the controls were designed to be easily expanded for a second well when we get a backup well installed.

This new pressure system was finished and made fully functional just a few days prior to the Stockholders Meeting. Several shareholders indicated happiness that the new system was delivering higher pressure water than previously.

Installation had required the disconnect of the well and the use of LPMWC’s emergency connection to the Goleta Water District connection. It was noted that the use of the Goleta connection probably cost somehow in the $5.5K to $10K range. The total cost of the entire pressure pump/ electrical control project was estimated at roughly $100K.

This brought up discussion of the high rates for Goleta water. It was noted that LPMWC has a single connection to the Goleta water main that is officially characterized as as single household connection. When all of our 65 households are connected and using Goleta water, the total is clearly very large compared to a single household. This pushes the cost into the highest tier charge rate (which is large expressly to encourage low water use}.

Normally this is not an issue since LPMWC is only connected to Goleta Water for short periods (e.g. during main flushing), but it does have a large effect when usage is over an extended period. Our connection to Goleta Water is historically old, and a number of years back neither LPMWC nor Goleta Water District could find a copy of the original agreement. At the time, LPMWC was advised not to try to negotiate a different rate for fear of losing the connection all together. It was decided that any renegotiation should be delayed until we have a second well that could act as a backup.

Jeff also discussed the project to install individual meters at the main connection of each member of the Board of Directors in a preliminary effort to obtain information on water use, meter costs, and the long term requirement to have water meters throughout the system. He indicated that he had discussed the project with several vendors but was having great difficulty getting firm bids for the effort from the vendors. He indicated that he would continue with the effort to getting a few meters installed.

John Holehouse then led a discussion of New Business.

A primary discussion point was the need for a new well as a backup for the existing well, which has been in service for a number of years. As Jeff had indicated in the Facilities report, the current well has a submerged pump at roughly a 150 foot depth. That well has not been pulled to the surface and maintained for a number of years. The next item in the list of capital improvement projects is to install a second well as a backup for the currently operating well. This second well could also supply water while maintenance is carried out on the current well (thus avoiding the use of Goleta water).

It was pointed out that the availability of well drilling services has been limited and costs have risen as a result of the drought (and the drilling of many wells around the area to obtain ground water).

Another item discussed was water quality. A number of shareholders living at the end of La Entrada complained of increased amounts of dark brown/black material in their water. It was pointed out that the material is most likely excessive manganese, which is a known problem with LPMWC water (along with excessive amounts of iron). Recent work at the well site may have caused excessive precipitation of manganese at low points in the mains. It was noted that treatments to reduce the iron or manganese are difficult and expensive, and the only method this far identified to help mitigate the problem has be flushing of the water lines. Unfortunately, the drought has resulted in reduced frequency of line flushing. Jeff pointed out the new pressure pumps should allow flushing at higher pressures, and that should better clean out precipitate in the mains. A system flushing should occur in the next few weeks using the new pressure pumps, and it is hoped that this will help the water quality issues.

[Note that a water quality report summarizing all the recent measurements of our water’s properties was distributed at the Shareholders Meeting, although there were no specific verbal discussions of the the report’s contents.]

A comparison of water costs was then presented by Dan Higgins. Published water rates from the Santa Barbara, Goleta, and Hope Ranch water districts were obtained from the Internet and used to calculate what water costs would be for a daily usage of 800 gallons a day over a 3 month period. The 800 gallons per day figure is the approximate average for usage at a single parcel in the LPMWC water system average over the 2016 calendar year. Dan displayed a chart showing that the cost would be $1867 for Santa Barbara, $773 for Goleta, $708 for Hope Ranch, while it would be only $255 for a parcel in our water company (LPMWC) ! It was noted that the high cost for the local water companies is due to the tied rates and the large assumed level of consumption. Also, the Hope Ranch situation is probably most similar to that of LPMWC, due to large lot sizes and large amounts of irrigation. LPMWC rates are also low because of our small size and a minimal number of paid employees.

Layne Wheeler talked briefly about the continued need to conserve our water despite the fairly wet winter this past year. Leaking pipes, toilets, or faucets should be fixed. Lawns and other plants should not be overwatered, allowing water to run down streets.

Rick Donovan 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 8:20PM.