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Home My WebLink AboutAgenda Packet - North Fork Water Company - 04/02/2013NORTH FORK WATER COMPANY 3694 E. HIGHLAND AVE., SUITE #30 HIGHLAND, CA 92346 ANNUAL STOCKHOLDERS MEETING April 2, 2013 - 2:00 p.m. AGENDA CALL TO ORDER PLEDGE OF ALLEGIANCE 1. Approval of Agenda 2. Public Comments 3. Approval of Annual Stockholders meeting minutes for April 3, 2012 4. Ratify Actions of North Fork Board of Directors for 2012 5. Election of Directors 6. Discussion and possible action regarding update and revisions to the 1950 North Fork by- Laws ADJOURN TO RE- ORGANIZATIONAL MEETING 7. Board Re- Organization a) Election of officers: President Vice President Secretary Treasurer b) Appoint Representative for: Exchange Plan Upper Santa Ana Water Resources Association 8. Operational Report / Delivery Schedule 9. Financial Statements and Report 10. Set 2013 Water Delivery Rates 11. Proposed 2013 -14 Budget 12. Set 2013 Assessments ADJOURN Pursuant to Government Code Section 54954.2(a), any request for a disability - related modification or accommodation, including auxiliary aids or services, that is sought in order to participate in the above - agendized public meeting should be directed to the District's Administrative Manager (909)885 -4900 at least 72 hours prior to said meeting. Subject to approval NORTH FORK WATER COMPANY 3694 E. HIGHLAND AVE., SUITE 930 HIGHLAND, CA 92346 ANNUAL STOCKHOLDERS MEETING APRIL 3, 2012 MINUTES President Arnold Wright called the Annual Stockholders meeting to order at 2:00 p.m. President Wright led the flag salute. PRESENT: Arnold Wright Ron Arnett Matt LeVesque Kip Sturgeon George E. "Skip" Wilson James Morales, Jr. ABSENT: None STAFF: John Mura John Vega Brian Tompkins Justine Hendricksen Mike Henderson Becky Kasten LEGAL COUNSEL: Steve Kennedy STOCKHOLDERS: Caroline Kiel -Ray Charles Kiel Tom Hooker GUEST (S): Robert Martin, Lisa McConley, Ken Meddock, Ben Coleman W ' Zol". 1Xi)MM018I, M /S /C (Wilson- Amott) that the April 3, 2012 agenda be approved as submitted. PUBLIC PARTICIPATION President Wright declared the public participation section of the meeting open at 2:03 p.m. There being no further written or verbal comments, the public participation section was closed. APPROVAL OF ANNUAL STOCKHOLDERS MEETING MINUTES FOR APRIL 5, 2011 M /S /C (Wilson - Morales) that the April 5, 2011 Stockholders meeting minutes be approved as submitted. NF Minutes 4/32012 :etb RATIFY ACTIONS OF NORTH FORK BOARD OF DIRECTORS FOR 2011 M /S /C (Arnott- Wilson) that the actions of the North Fork Board of Directors for 2011 be approved. ELECTION OF DIRECTORS M/S /C (Sturgeon - Morales) that the slate of Directors for 2012 be Arnold Wright, James Morales, Jr., Matt Levesque, Kip Sturgeon, George E. "Skip" Wilson, Ronald Arnett and Margaret Wright RESOLUTION 2012.01 — A RESOLUTION OF THE BOARD OF DIRECTORS OF THE NORTH FORK WATER COMPANY ESTABLISHING DATE AND TIME OF 2013 ANNUAL SHAREHOLDERS MEETING M/S /C (Arnott- Wilson) that Resolution 2012.01 be approved and the meeting be set for April 2, 2013 at 2:00 p.m. ADJOURN TO RE- ORGANIZATIONAL MEETING M/S /C (Sturgeon - Wilson) that the Stockholders Meeting be adjourned to the Re- Organizational Meeting Arnold Wright, President Justine Hendricksen, Secretary NF Minutes 4/3/2012 :etb NORTH FORK WATER COMPANY 3694 E. HIGHLAND AVE., SUITE #30 HIGHLAND, CA 92346 ANNUAL RE- ORGANIZATIONAL MEETING APRIL 3, 2012 MINUTES The Annual Re- Organizational Meeting was called to order by President Wright at 2:09 p.m. PRESENT: Arnold Wright Ron Arnott Matt LeVesque Kip Sturgeon George E. "Skip" Wilson James Morales, Jr. ABSENT: None STAFF: John Mura John Vega Brian Tompkins Justine Hendricksen Mike Henderson Becky Kasten LEGAL COUNSEL: Steve Kennedy STOCKHOLDERS: Caroline Kiel -Ray Charles Kiel Tom Hooker GUEST (S): Robert Martin, Lisa McConley, Ken Meddock, Ben Coleman BOARD RE- ORGANIZATION ELECTION OF OFFICERS M /S /C (Sturgeon - Wilson) that Arnold Wright be appointed Board President. M /S /C (Sturgeon - Wilson) that Ron Arnott be appointed Vice President. M/S /C (Sturgeon - Wilson) that Justine Hendricksen be appointed Secretary. M /S /C (Sturgeon - Wilson) that Brian Tompkins be appointed Treasurer. APPOINT REPRESENTATIVES NF Minutes 4/3/2012 :etb M/S /C (Wilson -Amott) that Arnold Wright be appointed as the North Fork Representative on the Exchange Plan with Kip Sturgeon as an Alternate. M/S /C (Wilson - Amott) that George E. "Skip" Wilson be appointed as the North Fork Representative to the Upper Santa Ana Water Resources Association with Kip Sturgeon as an Alternate. Mr. Mura gave an update of the North Fork committee and recommended that the committee continue to review the by -laws, operational plan review and articles of incorporation. M/S /C (Amott/Wilson) that Margaret Wright, Ron Amott and James Morales, Jr. be appointed the North Fork Ad -hoc Committee to review the by -laws, operational plan review and articles of incorporation. Director Sturgeon recommended that the committee review the governing documents related to the North Fork Water Company. OPERATIONAL REPORT Mr. Henderson presented an operational report to the Board of Directors. M /S /C (Wilson - Amott) to approve the operational report as submitted. FINANCIAL REPORT Mr. Tompkins presented an overview of the Financial Report. M /S /C (Wilson - Sturgeon) that the Board accept the Financial Report as submitted. SET 2012 WATER DELIVERY RATES M/S /C (Amott- Wilson) to set the 2012 delivery rate at 2" per share. PROPOSED 2012 -13 BUDGET Mr. Tompkins presented a detailed overview of the proposed 2012 -13 budget. M/S /C (Amott- Wilson) to accept the proposed 2012 -13 budget. SET 2012 ASSESSMENTS M/S /C (Amott- Wilson) to set the 2012 Assessments be set at $13.00 per share. ADJOURN The meeting was adjourned at 2:51 p.m. Arnold Wright, President Justine Hendricksen, Secretary NF Minutes 4/3/2012 :etb NORTH FORK WATER COMPANY 2012 OFFICERS & REPRESENTATIVES OFFICERS: President - Arnold Wright Vice President - Ronald Arnott Secretary - Justine Hendrlcksen Treasurer - Brian Tompkins EXCHANGE PLAN Arnold Wright, Primary Kip Sturgeon, Alternate UPPER SANTA ANA WATER RESOURCES ASSOCIATION George E. "Skip" Wilson, Primary Kip Sturgeon, Alternate DIRECTORS Arnold Wright Ronald Arnott Matt Levesque Kip Sturgeon George E. "Skip" Wilson James Morales Jr. Margaret Wright 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 f:3".VAW wl NORTH FORK WATER COMPANY 2013) Page 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 INDEX TO BY -LAWS Page ARTICLE1. General Provisions __________________________________ ________________ _______________ 5 Section 1.01 Definitions -------------------------------------------------- - - - - -- 5 Section1.02 2.02 Purpose_____________________________ _______________________________ 5 Section 1.03 Amendments_________________________ __ _______________ __ __________ 5 Section 1.04 12013 Code"_______________________ ___________ ____________________ 56 2.05 Notice of Meeting------------------------------------------ - - - - -- 7 Section 1.05 Provisions of Former By- Laws---------------------------- -- - - -- 6 ARTICLE II. Shareholders_________________________________________ ___________________________ _ _ __ 7 Section 2.01 General Corporation Law Applicable-------------------- - - - - -- 7 Section 2.02 Annual Meeting____________________ _______________________________ 7 Section 2.03 Special Meeting--------------------------------------------- - - - --- 7 Section 2.04 Place of Meeting-------------------------------------------- - - - - -- 7 Section 2.05 Notice of Meeting------------------------------------------ - - - - -- 7 Section 2.06 Form of Notice and Statement of Purpose-------------- - - - - -- 8 Section 2.07 Shareholders Entitled to Notice-------------------------- - - - - -- 8 Section 2.08 Shareholders Entitled to Vote---------------------------- - - - - -- 8 Section 2.09 Business to be Transacted--------------------------------------- S9 910 Section 2.10 Manner of Voting at Shareholders' Meeting------------ - - - - -- 9 Section 2.11 Election of Directors and Cumulative Voting----------- - - - - -- 9 Section 2.12 Directors Elected at Special Meeting-------------------- - - - - -- 9 Section 2.13 Inspectors of Elections------------------------------------------ Section 2.14 Changing Time of Annual Meeting--------------------- - - - - -- 10 Section 2.15 Quorum of Shareholders--------------------------------- - - - - -- 10 ARTICLE III. Directors____________________________________________ _______________________________ 11 Section 3.01 General Corporation Law Applicable------------------ - - - - -- 11 Page 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section3.02 3.06 Number---------------------------------------------------- - - - - -- 11 Section 3.03 Qualifications and Term--------------------------------- - - - - -- 11 INDEX - CONTINUED 12 Section 3.08 Pace Section 3.04 Organization Meeting------------------------------------ - - - - -- 11 Section3.05 P- Regular Meetings----------------------------------------------- I412 Section 3.06 Special Meetings------------------------------------------ - - - - -- 12 Section 3.07 Notice of Special Meeting-------------------------------- - - - - -- 12 Section 3.08 Place of Directors' Meeting------------------------------ - - - - -- 12 Section 3.09 Waiver of Notice and Consent to Meetings----------- - - - - -- P- 13 Section Section Section 1314 Section 14 ARTICLE IV. Section Section Section Section Section Section ARTICLE V. Section Section Section Section Section Section Section 3.10 Vacancies--------------------------------------------------- - - - - -- 13 3.11 Quorum----------------------------------------------------- - - - - -- 13 3.12 Business to Transacted ---------------------------------- - - - - -- 3.13 Compensation of Directors------------------------------ - - - - -- 13 15 4.01 Applies to all Notices------------------------------------- - - - - -- 15 4.02 By Whom Given, Method of Making, and Signing---- - - - - -- 15 4.03 Where Notice is to be Mailed---------------------------- - - - - -- 15 4.04 Method, Publication and Form-------------------------- - - - - -- 15 4.05 No Notice to Person Giving the Same------------------ - - - - -- 16 4.06 Actual Receipt of Notice --------------------------------- - - - - -- 16 s --- -- -- -- --- ---- -------- - ------ -------------- --------- ---------------- - - - - -- 17 5.01 Number of Officers---------------------------------------- - - - - -- 17 5.02 The President---------------------------------------------- - - - - -- 17 5.03 Vice President --------------------------------------------- - - - - -- 18 5.04 Secretary --------------------------------------------------- - - - - -- 18 5.05 Treasurer -------------------------------------------------- - - - - -- 18 5.06 General Manager----------------------------------------- - - - - -- 19 5.07 Duties of Officers May Be Delegated ------------------ - - - - -- 19 Page 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARTICLE VI. Certificates and Transfer of Shares-------------------------------------- - - - - -- 20 Section 6.01 By Whom Signed---------------------------------------- - - - - -- 20 Section 6.02 Form------------------------------------------------------- - - - - -- 20 Section 6.03 Registration of Pledge----------------------------------- - - - - -- 20 Section 6.04 Effect of Registration of Pledge------------------------ - - - - -- 20 Section 6.05 Charges and Liens on Shares--------------------------- - - - - -- 21 Section 6.06 No Transfer While Unpaid Liens---------------------- - - - - -- 22 Section 6.07 Assessments and Liens---------------------------------- - - - - -- 22 Section 6.08 Penalties, Interest and Collection Cost---------------- - - - - -- 22 Section 6.09 Record Holder Liable for Tolls and Charges---------- - - - - 2? 23 Delegation of Powers------------------------------------- - - - - -- 25 ARTICLE VII. Powers of Board of Directors--------------------------------------------- - - - - -- 24 Section 7.01 Seal-------------------------------------------------------- - - - - -- 24 Section 7.02 Share Register-------------------------------------------- - - - - -- 24 Section 7.03 Financial Reports---------------------------------------- - - - - -- 24 Section 7.04 Rules and Regulations----------------------------------- - - - - -- 24 Section 7.05 Transfer Fee----------------------------------------------- - - - - -- 24 Section 7.06 Compulsory Exchange of Certificates----------------- - - - - -- 25 Section 7.07 Dismissal of Employees---------------------------------- - - - - -- 25 Section7.08 Delegation of Powers------------------------------------- - - - - -- 25 Section 7.09 Tolls and Assessments 26 Section 7.10 Delinquency and Interest-------------------------------- - - - - -- 26 Section 7.11 Penalties Section 7.12 Suspension of Services Section 7.13 Measuring and Diversion Devices----------------------- - - - - -- 26 Section 7.14 Regulation of Water Service----------------------------- - - - - -- 27 Section 7.15 Extension of Distributing System----------------------- - - - - -- 27 Section 7.16 Restriction on Water Use------------------------------- - - - - -- 28 Page 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BY - LAWS OF NORTH FORK WATER COMPANY ARTICLE I. General Provisions Section 1.01 Definitions Company" means NORTH FORK WATER COMPANY, a corporation that was incorporated on January 13,1885, under the laws of the State of California. Board" means thetthe board of directors of eex -the Company. General Corporation Law" is used herein with the same meaning as in Section 100 of the Corporations Code of California, and as set forth in Division 1 of Title 1 of said Code.. -, and may be amended from time to time. Articles of Incorporation" includes amendments and means the articles of incorporation as last amended. The singular includes the plural and the masculine pronoun includes the other genders. Section 1.02 Purpose The purpose of Company is to furnish, supply and distribute water at cost to and for Page 5 Formatter Formatter 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 its shareholders for irrigation purposes in proportion to the number of shares of stock held by them respectively. Section 1.03 Amendments These by -laws may be repealed or amended or new by -laws adopted by (a) the vote of the shareholders entitled to exercise a majority of the voting power at a meeting of shareholders, or (b) the written assent of shareholders entitled to exercise a majority of voting power, filed with the secretary. Section 1.04 "19502013 Code" These by -laws as originally adopted, or as subsequently amended, shall be known and may be referred to at "1959as the "2013 Code of By -Laws of NORTH FORK WATER COMPANY;" and also as the "19502013 CodeL.-." Section 1.05 Provisions of Former By-Laws The provisions of the 19502013 Code that are the same or substantially the same as provision of the by -laws (called "former by- laws ") that were in effect immediately prior to the adoption of the /9502013 Code shall be deemed and construed as restatements and continuations thereof and not as new enactments. The 19502013 Code shall be effective immediately upon adoption. All provisions of said former by -laws that are not the same or substantially the same as provisions of said 19582013 Code shall be repealed at the time the 19502013 Code becomes effective. Page 6 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARTICLE II. Shareholders Section 2.01 General Corporation Law Applicable Except in those particulars and to the extent hereinafter expressly provided for, unless otherwise inconsistent with applicable law), all provisions (whether mandatory or permissive) of Ehapter 1 ef the General Corporation Law of the State of California. as now or hereinafter existing, are approved, adopted, and made applicable to eextpaaythe Company; and whenever no express provision is contained herein with respect to any matter authorized to be regulated, fixed, or established by or in the by -laws, it is intended to adopt and approve the provisions in said Ghepter -4 aw pertaining thereto and regulating or providing for the same. Section 2.02 Annual Meetin¢ Unless changed as provided in Section 2.14, a meeting of shareholders to be known as the annual meeting shall be held each year on the first SavamdayTuesday in Mam-hApKd at the hour of th4EW minutes after--'--two o'clock AP.M. for the purpose of electing a board of directors, and other purposes. Section 2.03 Special Meetings Special meeting of the shareholders for any purpose or purposes whatsoever may be held at any time upon call made by (a) the president, or (b) the beafdBoard by resolution adopted by majority vote, or (c) written assent of a majority of all acting directors, filed with the secretary, or (d) written assent of one or more shareholders collectively holding not less than one -fifth of the voting power of eempaB -the Company, filed with the secretary. Page 7 Formatter 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 2.04 Place of Meeting Unless some other place shall be appointed in any instance or instances as hereinafter provided, meetings of shareholders, both annual and special, shall be held at the principal office of eempa -the Company. Authority is hereby conferred upon the bear4Board, by resolution adopted by majority vote of all its members, or by written assent of a majority of such members filed with the secretary, to fix or designate €-land from time to time change) the place for any shareholders' meeting or meetings, one or more or all, whether annual or special. Any place so designated shall be not more that twenty-five miles distant from the principal office, and in such instance said meeting or meetings shall be held at the place so fixed or designated. Section 2.05 Notice of Meetin¢ Written notice of each meeting of shareholders, whether annual or special, shall be given to each shareholder entitled to notice not more than thirty (30) days nor less than five 5) days before the meeting in either of the following ways: First: By delivering such notice personally: or Second: By mailing such notice, charges prepaid, addressed to such shareholder at his address appearing on the books of eempan'the Companv. If no address appears on the books of eempax -the Companv, then the notice shall be addressed to the shareholder at Highland, California. Whenever a shareholder shall in writing give eeffpa The Company an address for the purpose of notice, the same shall be deemed the shareholder's "address appearing on the books of the company'' =,: as such expression is herein used. One method of service may be used as to some shareholders and the other as to other shareholders. Section 2.06 Form of Notice and Statement of Purpose Notice of any meeting shall specify the place, the day and the hour of meeting. In the case of special meetings the general nature of the business to be transacted shall be stated in the notice, but in the case of the annual meeting need not be stated; provided, however, when a proposal to amend the *n4e4esArticles of ieeegperadeaIncorporation is to be voted upon at a meeting, whether annual or special, notice of that fact shall be given. Section 2.07 Shareholders Entitled to Notice Where notice of any shareholders' meeting is to be mailed, notice shall be given to those who appear from the stock records as record holders at 5:00 o'clock P.M. on the day immediately preceding the day of mailing; and 5:00 o'clock P.M. on the day immediately preceding the day of mailing is the record date and time for the determination of shareholders entitled to notice of the meeting. Page 8 4 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 2.08 Shareholders Entitled to Vote Five o'clock P.M. on the fifth day next preceding the day first appointed for the shareholders' meeting is hereby fixed as the time for the close of stock books and the determination of those entitled to vote at the meeting.; and, subject to the provisions of law, only persons in whose names the shares stand on the stock records of eex+panythe Company at the close of stock books, as aforesaid, shall be entitled to vote at that meeting or any adjournment thereof. No transfer of shares shall be made on the stock records of eempa -the Company during the period elapsing between close of stock books and adjournment of the meeting on the day first appointed therefor. If a meeting by adjourned to a subsequent date, the stock books shall open upon adjournment so as to permit transfer but not so as to affect the right of voting determined as above provided. Section 2.09 Business to be Transacted At the annual meeting, directors to the number authorized shall be elected, reports of the affairs of eempa -the Company shall be considered, and any other business may be transacted which is within the powers of the shareholders, including the amendment, repeal and adoption of by -laws, the approval and ratification of amendments to the ar- tielesArticles of ineefperatienincorporation, and action upon or with respect to any or all questions and matter requiring the vote, consent or approval of the shareholders, or with respect to which the shareholders are permitted to act, subject, however, to t4eaRplicablc provisions of Seetie_ 2201 ofthe Gerperatiens Gedelaw requiring notice to the shareholder of special proposals. At a special meeting, any business may be transacted of the general nature specified in the notice thereof, but not otherwise. Section 2.10 Manner of Voting at Shareholders' Meetings At meeting of shareholders, all questions other than an election of directors or except as otherwise expressly provided by statute or by these by -laws shall be determined by majority vote of the shares represented at the meeting, and all voting shall be viva voce unless a majority in voting power of the shares represented shall demand a vote by written ballot. Section 2.11 Election of Directors and Cumulative Voting In an election of directors the entire number to be elected shall be elected at the same time and upon a single vote or ballot, and directors shall not be elected separately or in any number less than the entire number to be elected. Page 9 2 4 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 At such election a shareholder may vote for one or more directors but may not cumulate his votes and cumulative voting shall not be allowed in an election of directors. If there has been nominated for the office of director more than the number to be elected, or upon the demand of any shareholder represented at the meeting, or if voting by mail has been provided for, the election shall be by written ballot, otherwise it shall be viva voce. Section 2.12 Directors Elected at Special Meetin¢ Whenever for any reason no election of directors has been had for more than one year, a beaTdBoard may be elected at a special meeting of the shareholders called for that (in addition to any other) purpose, by the person or persons, in the manner, and upon the notice in these by -laws provided for calling and noticing special meeting of shareholders. The terms of directors elected at a special meeting shall expire at the same time as though they had been elected at the annual meeting next preceding such special meeting. Section 2.13 Inspectors of Elections Inspectors or an inspector of elections may be appointed in the manner and with the effect provided for in the General Corporation Law, and shall have and exercise the powers and authority there provided subject to the provisions of law, the by -laws, and the rules and regulations. The beff0oaId may make and from time to time change rules and regulations for the conduct of elections or any election, and for voting upon or with respect to any question or matter submitted to the shareholders for vote, consent or assent. The beardBoard may by rule or resolution prescribe the form of ballots and may provide ballots for use of the shareholders at elections or any election or in taking any vote; an may, in the case of ballots to be used in an election of directors, provide for printing thereon the name or names of candidates or nominees, and may also provide for voting by mail and for the nomination of directors prior to the election. Such rules may in addition to any other matters provide for the time or times and the method of filing proxies, casting ballots and the tabulation and certification of votes. All such rules and regulations shall operate impartially, fairly and equally. Whenever the filing of proxies is limited to a time prior to the meeting, and whenever in an election of directors the polls are to open or close at a specified time, notice of such limitation, opening or closing shall be stated in the notice of such meeting. Section 2.14 Chanpina time of Annual Meeting The beafdBoaId may advance or postpone (and thereby change) the time of any Page 10 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 annual meeting (as fixed elsewhere in these by -laws) by not more than sixty 60 days whenever it shall appear to the be8idBoaId that such change is necessary or desirable. Such change shall be effected by resolution adopted by majority vote of the beaiBoard or by written assent of a majority of the members, filed with the secretary prior to giving notice of the meeting, and thereupon the time for that annual meeting shall be that so fixed by the bearQoard and notice of the meeting shall be given accordingly. Section 2.15 Quorum of Shareholders The presence in person or by proxy of the holders of fifty percent J52OLolof the shares entitled to vote at any meeting shall constitute a quorum for the transaction of business, including the election of directors. ARTICLE III. Directors Section 3.01 General Corporation Law Applicable Except in those particulars and to the extent hereinafter expressly provided for; unless otherwise inconsistent with applicable law), all provisions (whether mandatory or permissive) of nat-3-erthe General Corporation Law of the State of California. as now or hereafter existing, are approved, adopted, and made applicable to eemparr;the Company; and whenever no express provision is contained herein with respect to any matter authorized or permitted to be regulated, fixed or established by or in the by -laws, it is intended to adopt and approve the provisions in said Part-31aws pertaining thereto and regulating or providing for the same. Page 11 0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2s Section 3.02 Number The number of directors shall be seven. Section 3.03 Qualifications and Term A director need not be a shareholder. The term of office of a director shall begin immediately upon his election; and each director so elected shall hold office until his successor is elected or until he resigns or is removed from office, whichever shall first transpire. Section 3.04 Organization Meeting A meeting of the beafdBoard (to be known as the "organization meeting ") shall be held immediately following adjournment of the shareholders' meeting at which elected for the purpose of organizing, electing and appointing officers. Any other business may also be transacted at such meeting. No notice of such organization meeting need be given. If not held at the time appointed or if reorganization be not effected or completed at such meeting, the business of reorganization shall be transacted or completed at the first regular or special meeting held thereafter, and if not then completed, then at any meeting regardless of when held. With consent of all the directors such organization eetin may be held at any time. Attendance at and participation in the proceedings of the meeting shall be deemed such consent. The consent of any director no present or participating shall be written and filed with the secretary and made a part of the minutes, either before, during, or after the holding of the meeting. Section 3.05 Regular Meetings Meetings of the beardBoard (to be known as -regular meetings ") shall be held without call at a time appointed therefor by resolution adopted by majority vote of the beafdBoard. It shall not be necessary to give notice of regular meetings, nor of the business to be transacted; provided, if the time for holding regular meetings be changed, written notice of that fact shall be given to those directors who were absent at the time of the adoption of the resolution effecting the change. If the time appointed for a regular meeting fall upon a legal holiday, it shall be held at the same hour on the next succeeding business day. Section 3.06 Special Meetings Special meetings of the beardBoard may be held from time to time upon call by the Page 12 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 president, or if he be absent or be unable or refuse to act, by any vice- president; and it shall be the duty of the president, or if he be absent or be unable or refuse to act, then of any vice - president, to call a special meeting upon the written request of two directors, specifying the purpose; and in the event neither the president nor vice- president shall call such meeting upon said request, then the same may be called by said two directors. Any call shall be delivered to the secretary or person whose duty it is to give notice. Section 3.07 Notice of Special Meetin¢ Notice of special meetings of the beaitlBoard specifying the time and place of meeting shall be given each director not later than on the day next before the day of the meeting, in any eeone of the following ways, to wit: First: By personal delivery of written notice of the meeting; or Second: By sending written notice of the meeting by maiLma' fax or tele electronic transmission; provided, said written notice shall be mailed or sent in sufficient time to permit its receipt on the day next before the meeting in the ordinary course of transmission; or, Third: By leaving written notice of the meeting at the residence or place of business of the director to be served with some person residing or regularly employed there; or, Fourth: Verbally or by word of mouth, including therein telephoning directly and personally to the director to be notified from and by the person whose duty it is to give notice, when intended as notice of meeting by the person giving the same. Section 3.08 Place of Directors' Meetings Meetings of the bea£dBoard, whether regular or special, shall be held at such place within the State of California as has been designated from time to time by resolution of the beaf4Board or by written consent of all members of the Board; and, in the absence of such designation shall be held at the principal office of eefapaRy -the Company. Section 3.09 Waiver of Notice and Consent to Meetings Directors may waive any and all provisions of law and of these by -laws, in respect of call, notice and place of meetings or any of them, and may consent to the holding of any meeting without call and notice or either of them and without regard to the place where held; and any director may waive call, notice and place of meeting, or any of them, in respect of himself and may consent to the holding of any meeting without call and notice, or either of them, and without regard to the place where held. Any regular or special meeting of directors held with or upon the unanimous consent or approval of all the members of the bee.EdBoard (and attended by not less than a quorum) shall be valid without regard to call and notice or either of them and without regard to the place where held, and the proceedings of any such meeting shall be valid and constitute the act of acts of the beRr Board as fully and conclusively as though taken and Page 13 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 had at a meeting duly called and noticed and held at the place duly appointed therefor. Attendance at and participation in the proceedings of any meeting (attended and participated in by not less than a quorum), without objection to the regularity or sufficiency of or lack of call and notice or either or the place where held, shall constitute and be a waiver in respect of such matters and an irrevocable consent to the holding of such meeting on the part of and by each director so attending and participating without objection. Such herein authorized or referred to waiver and consent or either of any director not present at such meeting may be made or given either before, during or after the meeting, and may be made and evidenced in any of the following ways, to wit: a) In writing filed with the secretary either before, during or after the meeting; b) Subscribing at the foot of the minutes of such meeting an approval of such minutes; c) Approval without objection of the minutes of such meeting at a subsequent meeting of the beardBoard attended by the director who was absent from the first mentioned meeting and whose waiver or consent is to be secured. Section 3.10 Vacancies Any vacancy in the office of director, however created or arising, may be filled by a majority of the remaining directors though less than a quorum; and the shareholders may fill any vacancy no filled by the directors. Section 3.11 Quorum A majority of the authorized number of directors shall be necessary to constitute a quorum for the transaction of business; and, unless otherwise required by law or these by- laws, every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the beaxd—.Board. Section 3.12 Business to be Transacted It shall not be necessary to state in any notice whether of a regular or special meeting the nature of the business to be transacted thereat, and any business that the beafdBoard may have transacted at a regular meeting may be transacted with like effect at a special meeting, unless otherwise provided by law. Section 3.13 Compensation of Directors Directors shall not receive compensation for their services at meetings of the beardBoard unless its payment has been first authorized. At the annual meeting, the shareholders may fix the compensation of directors for the ensuing year, which may be for all services or for attending meetings only, and may be a stated amount for each meeting Page 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 attended or a salary. Should the shareholders fail to fix such compensation, it may be fixed by resolution adopted by vote of not less than two- thirds of the authorized number of directors. A director may be allowed fair reBumefatieremuncration to be fixed or approved by the bear Board for services other than attending meetings when no compensation therefor has been fixed. A director shall be allowed his reasonable expenses when engaged in the business of eempRn the Company, to be audited, allowed and paid as other claims against the eempRn Company. ARTICLE IV. Page 15 2 H'1 10 it 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Notices Section 4.01 Applies to All Notices Except as in conflict with law or other provisions of these by -laws, the provisions of this article are intended to and shall apply to all notices required or permitted to be given, including notice of shareholders' meetings, directors' meeting and assessments. Section 4.02 By Whom Given, Method of Making and Signing Notices shall be given by the secretary or by an assistant - secretary if such assistant be so directed by either the secretary, the president, or the besFdBoard. If the person whose duty it is to give any notice shall fail or refuse so to do, then it shall be given by any person thereto directed by the president or the bearElBoard; or in the event of a called meeting, it may be given (in the event of such refusal) by the one directed so to do by the person or persons calling the meeting. Whenever a written notice is required to be given or is given under these by -laws or pursuant to any provision of law, it may be made by any method appropriate for such purpose, including longhand writing, printing, stamping, transmission, or by one or more or all such methods, or in part by one method and in other parts by another or other methods. No notice need be actually signed -or subscribed by the hand of the person giving it -, and in lieu of actual signing, the name of such person may be made by the method used in making any other portion of the notice, or by any method by which any portion of the notice might be made, as hereinbefore provided. Section4.03 Where Notice is to be Mailed When resort is had to giving any notice by mail, such notice shall be deposited in the United States Post Office at Highland, California, or in a United States Post Office within not more than fifty kL01miles from said principal office, with postage thereon prepaid and directed to the person to be served at the address of such person, if such address appears on the records of eempan ythe Company; and if same does not appear on such records, then addressed to such person at Highland, California. The notice shall be deemed to have been deposited in said Post Office if delivered to a letter carrier making mail deliveries from said Post Office, or when deposited in a letter box or other mail receptacle from which mail is regularly collected fEefrom said Post Office. Section 4.04 Method Publication and Form The beafdBoard shall have power, subject to provisions of law or of these by -laws specifically regulating the matter, from time to time and at any time, to determine and order, with respect to notices or any notice as follows: Page 16 0 v 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 a) Where two or more methods are available, which method shall be used and use of one method as to one or more persons to be served and another method or methods as to others; b) The newspaper in which publication is to be made; c) The date or dates of publication; d) The form and contents of the notice; e) The date of mailing of the notice. If the time has arrived when the person charged with the duty desires to give notice and the board has failed to determine any of the above, the same shall then be determined by such person; and the power reserved to and conferred upon the besizdBoard, as above stated, shall be exercised and the determination made by the person giving the notice. Section 4.05 No Notice to Person Giving the Same Where the person giving any notice shall belong to the class entitled to notice, no notice need be mailed to or otherwise served upon such person, and it shall be conclusively presumed that service of the notice has been made personally upon that person. Section 4.06 Actual Receipt of Notice Whenever any person (whether shareholder, director or other) shall be entitled to any notice, actual receipt by such person of any writing intended as a special or specific notice to such person, or of any written or printed notice used or intended for use generally as or for notice to the class of which the person is a member, shall constitute and be notice of the contents of such writing and due and sufficient service of such notice, regardless of how or in what manner served or how or in what manner or by whom delivery was made, or how or in what manner or from whom it was received; and no other or further notice need be given or service made, and such person shall be deemed to have waived any irregularity or omission in respect of such notice and service, unless written protest specifying the grounds of insufficiency or the nature of the omission be immediately filed with the eempanyCompany. Page 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Officers Section 5.01 Number of Officers 0 The officers of eempaxythe CompanX (herein called 'regular officers ") shall be elected by the directors and shall be a president, a vice- president, a secretary, a treasurer and a general manager. The beaedBoard may also appoint one or more additional vice - presidents, one or more assistant - secretaries, one or more assistant - treasurers, and such other officers as the bear Board deems desirable for the transaction of the business of eexipenythe Company . The president and the vice- president shall be members of the baa4Board, and if either shall cease to be a director at any time, he shall, ipso facto, cease to be such president or vice- president. No other of said officers need be members of the baafQoard. Any two or more of said officers, except those of president and secretary, may be held by the same person. Regular officers shall be elected annually at the organization meeting of the beaF(iBOard, or whenever the beafdBoard shall determines; provided, they may always be elected whenever a vacancy exists. Other officers may be elected at any meeting of the beardBoard. Unless sooner removed by the beardBoard, or unless he resigns of becomes or is disqualified, an officer shall hold office until his successor is chosen and qualified. Any officers, whether elected or appointed by the beaidBoaId, may be removed at any time by the affirmative vote of a majority of the whole baffdBOard, and each officer shall take and hold office subject to the right of removal by the bea-FlBoard. Section 5.02 President. The president shall be the chief executive officer of eempae -the Company and as such shall;; a) Preside at all m eetin s of shareholders; and directors. Such shall not prevent him from voting upon any question either at a shareholders' meeting or as a director at a direeters;directors' meeting; Page 18 Formattei Formattei 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 b) Unless otherwise directed by the bear Board, sign as president all deeds and instruments in writing which have been first approved or authorized by the c) Have, subject to advice of the beaffdBoard, general and active supervision of the business and affairs of eempanythe Company, and shall have power to cause the orders and resolutions of the bear Board to be carried into effect. Section 5.03 Vice - President The vice- president shall, in the absence or disability of the president, perform the duties and exercise the powers of the president and shall perform such other duties as the beRfdBoard shall prescribe. Section 5.04 Secretary The secretary shall: a) Attend all meetings of the beaFgBoard and all meetings of the shareholders and record all votes and minutes of all proceedings in a book (to be known as the minute book ") to be kept for that purpose. He shall perform like duties for the standing committees when required; b) Keep the corporate seal of eampaaythe Company and books of blank certificates of stock, fill out and countersign all certificates issued, and affix the corporate seal to all papers requiring a seal; c) Keep proper account books and such records and books pertaining to the issuance and transfer of shares as may be required by law, or these by -laws, or as the bear Board shall prescribe, and discharge such other duties as pertain to his office, or which may be required by law, or by these by -laws, or by the Section 5.05 Treasurer The treasurer shall: a) Have custody of the corporate funds and securities and keep full and accurate account of receipts and disbursements in beef - ebooks belonging to eeffrgaagthe Page 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Company, and deposit all moneys and other valuable effects in the name and to the credit of eampa -the Company in such depositories as may be designated by the Board; b) Disburse the funds of eenpa -the Company as may be ordered by the bear Board taking proper vouchers for such disbursements, and render to the president and beafdBoard, at the regular meetings of the beafdBoard, or whenever the bear Board may require it, and account of all his transactions as treasurer and of the financial condition of the eempa - Company; provided, the beafdBoard may prescribe the manner in which funds shall be withdrawn from and paid out by any depository; c) Give een -the Company a bond if required by the bear Board in a sum and with one or more sureties satisfactory to the bear Board for the faithful performance of the duties of his office, and for the restoration to company, in case of death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to cempan -the Company: Section 5.06 General Mana¢er The general manager shall be at all times subject to direction of the beaislBoard; and, subject to such direction, he shall take charge of, control, look after and attend to the maintenance of all property, the distribution and delivery of water, the hiring of, discharging of, and performance of duties and or by the employees, the billing and collection of water charges, and the observance of the rules and regulations. He shall perform such other duties as pertain to the office of general manager of as may be prescribed by the Board. Section 5.07 Duties of Officers May be Delegated In case of the absence of any officer of eeh-kpa 'the Company, or for any other reason that the bear Board may deem sufficient, the beaTdBoard may delegate for the time being, one or more or all of the powers or duties of such officer to any other officer or to any director, provided a majority of the entire beardBoard concur therein. Page 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARTICLE VI. Certificates and Transfers of Shares Section 6.01 By Whom Sigma Certificates for shares shall be signed by the president or vice- president and by the secretary or an assistant - secretary if such assistant be thereto authorized by the Section 6.02 Form Subject to the provisions of law and these by- h*eslaws, certificates for shares shall be of such form and device as the beeP1Board may direct. The person to whom issued shall be denominated therein as the "record holder =_ A voluntary encumbrance of the shares is herein called a `pledge°.= The person in whose name a pledge of shares may be registered shall be known as the "registered pledgee.-." Each certificate shall be issued and held upon and subject to all of the conditions and provisions thereon stated, all of which shall be binding upon the record holder, the registered pledgee (if and) and any transferee or person claiming an interest in the shares, or any of them evidenced thereby. Page 21 Formatter Formatte 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 6.03 Registration of Pledge Upon satisfactory evidence of a pledge, the eempaa -Company shall note the transaction (with the name of the pledgee) on its books, or on the share certificate. One or more pledges may be so registered, their priority being indicated by the expressions "first pledgee ", "second pledgee" and so forth. Section 6.04 Effect of Registration of Pledge When any pledge has been so registered, the shares shall be held, rights in respect thereof exercised and the pledge released or transferred upon and subject to the provisions, and in the manner and with the effect, as follows: The record holder shall be deemed the shareholder as regards eeRip"he Company, and as such shall represent the shares and exercise all rights, vote, consent and assent in respect thereof, and be entitled to receive the water allocated to such shares. The rights and interest of the record holder and of any successor and the title to such shares may be transferred upon the books of eampanythe Company and a new certificate issued subject to the pledge without the act, consent or endorsement of the pledgee. When a pledge has been so registered, and the address of the pledgee appears on the books or records of the Company, the Company will not sell or forfeit the pledged shares for nonpayment of an assessment unless at least ten 10 days prior to such sale or forfeiture there is mailed to such pledgee at said address of the pledgee, or in lieu thereof, delivered to the pledgee, a copy of the notice of assessment given with respect to such assessment, or in lieu of such copy, a notice stating the fact of the assessment and the time and place for the sale of forfeiture of delinquent shares. The pledgee shall not be personally liable for the payment of tolls, water charges, or assessments, unless payment thereof has been assumed or guaranteed by the pledgee, or service rendered upon or to the order of the pledgee. The interest and rights of the pledgee, as such, may be transferred on the records of eempa the Company and a new certificate issued (upon cancellation of the old) showing the new pledgee, or a pledge may be released without the act, consent or endorsement of the record holder or of anyone appearing to be the owner of said shares. Page 22 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 6.05 Charges are Liens on Shares Each charge or toll for water delivered to or for the record holder of any shares by virtue of or in respect or ownership of such shares is a lien against said shares from the time when furnished until paid. Said lien may be foreclosed in the manner which is at the time of foreclosure provided by law of the State of California for foreclosure of a pledge. Notice of the time and place appointed for the sale of any shares upon foreclosure of such lien shall be mailed to the record holder of said shares at the address of such record holder as it then appears upon the books of eampa -the Company, and if no address appears, then mailed to said record holder at Highland, California. No demand for payment or other notice of sale to the record holder or to any person appearing by the records of eempanythe Company to have an interest in said shares need be given other than as hereinbefore provided. At any such sale or sales eerepaey, the Company may bid and purchase. Section 6.06 No Transfer While Unpaid liens No transfer of the shares of eempaeythe Companv can or will be made on the books of eaR+panythe Company while any assessment, charge or tool there- against remains or is unpaid. Section 6.07 Assessments and Liens The beaedBoard shall provide that each certificate shall bear on its face a statement that the shares evidenced thereby are assessable and subject to liens, and also such other provisions in connection therewith as the bea- PdBoard deems proper, subject to the law, the aetiefesArticles of ineerperatie Incorporation, and these by -laws. Section 6.08 Penalties, Interest and Collection Costs Each shareholder shall be liable for payment of and shall pay to eetaparythe Company, upon demand, all expenses incurred by eempan The Company in collecting or enforcing payment from such shareholder of any delinquent assessment, charge, toll or other indebtedness. Included in such expenses are attorneys' fees in any proceeding for the enforcement of any lien herein provided for, or the collection of such indebtedness, whether by court action or otherwise, and all expenses of any sale. Page 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 All penalties on delinquent assessments, interest on overdue charges, tolls or other indebtedness, and expenses of collection, as above provided for, shall be added to the principal debt, and shall become and be a lien upon and against the shares and be secured thereby and enforced in the same manner and with the same effect as the principal debt. Whenever elsewhere in these by -laws or in the share certificates teethe tern assessment, charge or toll shall be used, such term shall be deemed to include, in each and every instance whenever such construction is possible or permissible, all penalties, interest and collection expenses pertaining to such assessment, charge or toll, or attaching, accruing or resulting from the nonpayment thereof when due. Section 6.09 Record Holder Liable for Tolls and Charges The record holder of any shares shall be entitled to the delivery of all water apportioned to such shares, subject to suspension or discontinuance, as herein provided, and shall be personally liable for the payment of all tolls, charges, interest, costs and penalties in respect of or on account of such shares during the time the same are registered in his name on the books of eempe -the Company. Page 24 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARTICLE VII, Powers of Board of Directors The bear Board, subject to restrictions of law, the articles of incorporation, and these by -laws, shall exercise all of the powers of eefapa -the Company; and without prejudice to or limitation upon its general powers, the beH-dBoard shall have and is hereby given full power and authority, in its unlimited discretion (to be exercised by resolution adopted by majority vote of all members of the bea-rdBoard' whether denominated a rule or regulation of otherwise), in respect of the matters and as hereinafter set forth, to wit: Section 7.01 Seal To adopt, use and change a corporate seal of form and device approved by the Board; provided, there shall be set forth on said seal, the name of the eexTanyCompany and the State and date of incorporation. Said seal shall be affixed to the share certificates and such other instruments as the bear-Board shall direct. Section 7.02 Share Register To prescribe the form and provide for keeping pertaining to the issuance, registration and transfer of shares. Page 25 a share register and records Pormattel 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 7.03 Financial Reports To prescribe the form and provide for making and giving financial statements and to the shareholders. The yr ..a..:,,. s of -Seer:,... 3A„A- of the i',....-.,...atiens Gede 8 standards. Section 7.04 Rules and Regulations To adopt, repeal, modify, from time to time change, and enforce all rules and regulations not inconsistent with the laws of the State of California, or the ftmielesArticles of ineefperatiexIncorporation, or these by -laws, by the bea-rdBoard deemed essential or desirable for the management or conduct of eersthe Company's business and affairs, or the exercise of the beard'sBoard's powers. Said rules and regulations may in addition to any other things provided for and regulate any matter in this article referred to and which is authorized to be determined by the beEff dBoard. Section 7.05 Transfer Fee To provide for the payment of and fix the amount of a transfer fee for the transfer of shares upon the books of eemp The Company; provided, such transfer fee shall not exceed twe dollars o? -L .00) for each new certificate issued Section 7.06 Compulsory Exchange of Certificates To require the respective holders of outstanding share certificates, or of any of such certificates, to surrender and exchange them for new certificates within a period to fixed by the bea4Board, not less than thirty kLOhdays from the giving of notice, whenever the ertielesArticles of Incorporation have been amended in any way affecting the statements contained in the outstanding share certificates, or whenever it becomes desirable for any reason in the discretion of the bear-dBoard to cancel any outstanding share certificate and issue a new certificate therefor conforming to the rights of the holder. In any order requiring such surrender and exchange, the bearQoard may provide that no holder of any such certificate ordered to be surrendered shall be entitled to vote or to receive any water or exercise any of the other rights of the shareholders of record until he shall have complied with such order, but such order shall only operate to suspend such rights after notice and until compliance. Notice of such order shall be given in the manner prescribed in these by -laws for notice of meetings of shareholders. Such duty of surrender may also be enforced by action at law; and any shareholder having the ability, or other person having the possession and control, refusing or failing to surrender and exchange any certificate in accordance with the order of the bea-rdBoard shall be liable to eei -the Company for all damages incurred by it from such refusal or failure, including reasonable attorneys' fees incurred by eempa -the Company in enforcing such duty. Section 7.07 Dismissal of EmTloyees Page 26 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 To dismiss any employee of the Company (whether regular or temporary) and terminate his employment regardless of the period of employment, whether express or implied, without liability on eempanythe Company other than for compensation for services actually performed to the time of dismissal and pro -rated (if that be necessary) at the rate provided for in the contract, or otherwise agreed upon or payable; and regardless of whether so stated in the contract, or at the time of hiring, the power of the beaTBoard to dismiss an employee of the Company as herein provided shall be deemed a part of every employment and every contract of employment with the Company, whether such contract of employment be written or verbal; and no officer, manager, superintendent, or other representative of the Company shall have any authority to employ any person other than upon and subject to the right of the beardBoard to terminate thesuch employment with the Company at any time without liability resulting therefrom; provided, the bear-lBoard shall have power to waive such right of dismissal in any hiring by the Company for a period of not in excess of one year when the contract is in writing and shall contain an express waiver of this provision and shall have been expressly authorized by resolution of the beafBoard. Section 7.08 Delegation of Powers To delegate to any zanjero, superintendent, or other employee or agent of eeRipanythc Company the enforcement of the rules and regulations of eempaRythe Company and the determination of all matters of a ministerial nature. Section 7.09 Tolls and Assessments To fix and from time to time change, the charges or tolls payable for water furnished or other service rendered; and to levy, collect, and enforce assessments against the shares of stock. It shall lie within the power of the bear Board to determine what part of the revenue of eempaythe Company shall be raised by assessments and what part by tolls or rates and what amount or items shall be charged to current operating expenses and what to permanent additions or betterments. Section 7.10 Delinquency and Interest To provide the time when tolls, charges, and accounts shall be due and when delinquent, and for the payment of interest on past due tolls, charges and accounts at the rate of not to exceed ten percent (10%) per annum. Page 27 4 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 7.11 Penalties To provide for the imposition and enforcement of a penalty for violation of the rules and regulations of eampa -the Company not exceeding in any instance the sum of Twenty - five Dollars ($2-5,L$ .00). Section 7.12 Suspension of Services To provide for the suspension of water service and for discontinuance of water delivery for violation of the rules and regulations or for failure to pay any charges, tolls, assessments, costs, interest, penalties or other sums payable to eemppai Company, and the time when and the conditions upon which such delivery or service shall be resumed. Such discontinuance may be solely with respect to the delinquent shares, or with respect to all shares of the shareholder, whether delinquent or not. Section 7.13 Measuring and Diversion Devices To provide for, determine and fix the location and installation of the measuring gates, hydrants, weirs, and meters for turning out or measuring the water to which the respective shareholders may be entitled, and that no gate, hydrant, weir or meter shall be installed or changed without the consent and approval of the lBoard, and that each such gate, hydrant, weir or meter shall be installed and/or maintained at the expense of the shareholder or shareholders using the same. Any such appliance shall be under the control of eempaaythe Company and be deemed a part of eampa asihe Company's distributing system. No shareholder, by virtue of the ownership of any share, shall be entitled to connect with the distributing system used by eempax -the Company for delivery of water, or to take water therefrom, except with the consent and upon and subject to the rules and regulations of eempar -the Company pertaining thereto; and eemp the Company reserves and shall have full control over all storing, distributing, measuring and diversion appliances, and over all water until it shall have been actually released or delivered to the shareholder. Section 7.14 Regulation of Water Service To provide, determine and fix, at such time or times and in such manner as the beafdBoard shall determine, and to change, any or all of the following with respect to delivery of water, to wit: a) The amount of water available for distribution to the shareholders, and the amount apportioned for and to be delivered to each share for any season, year, or Page 28 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 period of time. In making such determination, the beefdBoard shall take into consideration all factors by them deemed relevant, and their determination in good faith shall be conclusive upon each and every shareholder; b) The time when delivery shall begin and end each season or year; c) The times during the season when delivery is to be made, and for delivery in heads upon recurring periods, and the amount delivered at any time, and the minimum and maximum number of shares in respect of which delivery will be made at on place or at one time; d) The notice required for and conditions under which delivery is to be made; e) That any stockholder not taking the water allotted to his shares at the time provided therefor shall forfeit or lose his right to the delivery of that water. Section 7.15 Extension of Distributing System To provide and determine the place or places where, and the points to which, the water distributing system, or any other system, service, or appliances, of eempanythe Company shall be located or extended. The holding of shares of eempan -the Company shall confer no right upon the shareholder to have any pipeline, water conduit, or other appliance of eefapae -the Company enlarged or extended without the consent of the bear Board; and the beardBoard shall at all times be the exclusive judge of the necessity and expediency of constructing, enlarging, changing, and extending the water distribution system or other appliances of eei:npanythe Company, and such expediency and necessity shall at all times be determined by the and subject to the sole and uncontrolled discretion of the beeFdBoard.. Section 7.16 Restriction on Water Use treated. Page 29 Formattei 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NORTH FORK WATER COMPANY WRITTEN ASSENT OF SHAREHOLDERS TO 19- 592013 CODE OF BY -LAWS We, the undersigned shareholders of NORTH FORK WATER COMPANY, a California corporation, severally holding the number of shares stated in the column to the right opposite our respective signatures, and collectively holding not less than two- thirds of the outstanding shares of the corporation and being collectively entitled to exercise not less than two- thirds of the voting power in the corporation, do hereby assent to, approve and adopt the foregoing by -laws (therein and hereinafter referred to as the "f9592013 Code.:) as and for the by -laws of said corporation. This assent may be signed in any number of counterparts. Each shall be deemed an original and all shall constitute one instrument. When signed by shareholders collectively entitled to exercise no less than two - thirds of the voting power, this assent shall be filed with the secretary of the corporation who shall thereupon execute and attach his certificate showing the number of shares assenting and the number of shares outstanding. Upon execution of such certificate, said 19502013 Code shall become effective. NAMES AND SIGNATURES DATE OF NUMBER OF OF SHAREHOLDERS SIGNING SHARES Page 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NORTH FORK WATER COMPANY CERTIFICATE OF SECRETARY TO 19392013 CODE OF BY -LAWS I ta. arE T-GEPPLERq, Secretary of NORTH FORK WATER COMPANY, a corporation, hereby certify that foregoing 19392013 Code of By -laws and Written Assent of Shareholders were received and filed by me as such secretary upon the date of this certificate; that at the time or times said assent was signed and at this time, the number of issued shares of the corporation &was and is 7200; that said assent was signed by shareholders collectively holding shares; that the shareholders signing said assent collectively held more than two- thirds of the issued shares and collectively were and are authorized to exercise more than two- thirds of the total voting power of and in said corporation; that said assent and this certificate are attached to the original of said 1939 eede2013 Code. IN WITNESS WHEREOF, I have hereunto set my hand as such secretary and affixed the seal of said corporation this day of 19302013. Page 32 Secretary, North Fork Water Company NORTH FORK WATER COMPANY 2012 OFFICERS & REPRESENTATIVES OFFICERS: President - Arnold Wright Vice President - Ronald Amott Secretary - Justine Hendricksen Treasurer - Brian Tompkins EXCHANGE PLAN Arnold Wright, Primary Kip Sturgeon, Alternate UPPER SANTA ANA WATER RESOURCES ASSOCIATION George E. "Skip" Wilson, Primary Kip Sturgeon, Alternate DIRECTORS Arnold Wright Ronald Amott Matt Levesque Kip Sturgeon George E. "Skip" Wilson James Morales Jr. Margaret Wright North Fork Water Company Annual Operations Report For Irrigation Season April 2012 through March 2013 Daily Operations: Daily operations continued to be routine without any significant changes or problems. Maintenance of easements and right of ways continued to be performed satisfactorily by East Valley Water District (EVWD) staff, shareholders, and contractors during the reporting period. Repairs &t Maintenance: Repairs made by EVWD staff include: Rebuilding of the gate valve on Weir 17. Repairing of the cover over Weir 20. Repairs and replacement of miscellaneous parts to the cover on the Oak Creek diversion box. Removal of sand from sandboxes at North Fork Intake, Plunge Creek, and Weir 40. One area of concern is the Plunge Creek Siphon. Staff inspected and found four leaks on the siphon. During the repair work for the noted leaks staff found and repaired additional leaks that had surfaced. Noted leaks have been temporarily repaired, a permanent fix is needed in the near future. By -Laws: Attached for your review and approval is staff recommended changes to existing by -laws. Staff reviewed the existing by -laws and determined that existing by -laws are in need of updating. Updates include regulatory and technological changes as well as changes to Board operations. Legal Counsel has reviewed the recommended changes. Uperades: EVWD completed the upgrade and increased capacity of Plant 134. The new treatment process includes microfiltration and an increase treatment capacity of 4million gallons per day. With the additional treatment capacity at the treatment plant EVWD will be seeking additional shares to secure firm water deliveries to meet growing demands. Delivery Schedule: Included in the Board Packet for your approval is a copy of the proposed irrigation delivery schedule for next fiscal year. The delivery schedule reflects North Fork Shareholder supply to be 2" per share and Bear Valley Shareholders delivery to be .27' per share. NORTH FORK CANAL ZANJERO DELIVERY SCHEDULE 2013-2014 RUN #1 TOTAL RUN #2 WEIR NAME DEL'Y WEIR Arnott 20 Gutierrez 5 36 EVWD 260 Canal Loss 40 Tot Canal 360 RUN #3 TOTAL WEIR NAME p DEL'Y I Arnott 45 22 Christiansen 26 Hennon 26 Spitzer 36 EVWD 260 Canal Loss Tot Canal 43 I RUN #5 WEIR NAME TOTAL NAME DEL'Y In , 5 45 z 5 22 Christiansen 12 26 Spitzer 10 36 EVWD 260 260 Canal Loss 43 Tot Canal 376 RUN #4 TOTAL WEIR NAME DEL'Y 12 3 Calvary 5 17 M. Allen 10 17 Ciriel 260 is Pavlich 43 34135 La'Tourette 37-5 36 EVWD Canal Loss Tot Canal TOTAL RUN #6 DEL'Y WEIR 7 2 11 25 260 40 400 TOTAL DEL'Y 16 Wright 15 18 Wright 15 36 EVWD 260 36 EVWD 260 Canal Loss 40 Canal Loss 40 Tot Canal 375 Tot Canal 325 Filename 2013-2014 Delivery Schedule.xlsx Last Revised 3/26/2013 BVM Page 1 Production Staff Copy NORTH FORK CANAL ZANJERO DELIVERY SCHEDULE 2013-2014 RUN #7 WEIR NAME 3 Calvary 26 Riddle 36 EVWD 40CanalLoss Tot Canal RUN #9 WEIR NAME Or i kkif I Arnott WEIR NAME DEL'Y 435 1 N/,RIC, 13 Kiel 36 EVWD WEIR Canal Loss Tot Canal RUN #11 WEIR NAM I Arnott 10 Kiel 22 Christiansen 36 EVWD Canal Loss Tot Canal Filename 2013-2014 Delivery Schedule.xisx Last Revised: 3126/2013 BVm TOTAL RUN #8 TOTAL DEL'Y WEIR NAME DEL'Y 10 is Pellow 10 260 36 EVWD 260 40 Canal Loss 40 320 Tot Canal 320 420 TOTAL I RUN #10 TOTAL DEL'Y WEIR NAME DEL'Y 75 10 Kiel 75 260 22 Christiansen 12 40 36 EVWD 260 420 Canal Loss 43 Tot Canal 435 TOTAL RUN #12 TOTAL DEL'Y WEIR NAME DEL'Y 45 1 Arnott 45 5 p R 71qfg MV111M 75 3 Calvary 10 12 17 M. Allen 7 260 17 Ciriel 2 43 18 Pavlich 11 435 36 EVWD 260 Canal Loss 40 Tot Canal 375 Page 2 Production Staff Copy NORTH FORK CANAL ZANJERO DELIVERY SCHEDULE 2013-2014 RUN #13 TOTAL RUN #14 TOTAL WEIR NAME DEL'Y WEIR NAME DEL'Y WIN p1wahl H 10, 1 Arnott 46 No Deliveries Ca le 5 36 EVWD 260 34135 LaTourette 25 40 Rich 28 ... 36 EVWD 260 46147 Valencia Lea 84 Canal Loss 40 53 Smith 3 Tot Canal 325 Canal Loss 40 Tot Canal RUN #15 TOTAL RUN #16 TOTAL WEIR NAME DEL'Y WEIR NAME DEL'Y WL 176W1, IRam ffl, No Deliveries No Deliveries 1111 i11 I ISIMN g,4M 18 Pellow 10 3 Calvary 10 36 EVWD 260 20 Gutierrez 5 Canal Loss 40 36 EVWD 260 Tot Canal 310 Canal Loss 40 Tot Canal 315 RUN #17 TOTAL RUN #18 TOTAL WEIR NAME DEL'Y WEIR NAME DEL'Y I Arnott 45 1 Arnott 45 r U H 91,01it!, 20 Gutierrez 6 22 Christiansen 12 26 Spitzer 10 26 Hennon 5 36 EVWD 260 26 Spitzer 10 36 EVWD 260 Canal Loss 40 Canal Loss Tot Canal 360 Tot Canal 375 Filename: 2013-2014 Delivery Schedule.xlsx Last Revised 3/2612013 BVM Page 3 Production Staff Copy NORTH FORK CANAL ZANJERO DELIVERY SCHEDULE 2013-2014 RUN #19 WEIR NAME TOTAL DEL'Y RUN #20 WEIR TOTAL NAME DEL'Y 260 17 M. Allen I Arnett 45 Arnett 45 22 Christianse 36 EVWD Canal Loss Tot Canal RUN #21 WEIR NAME Arnett 1 18 Wright 36 EVWD Canal Loss Tot Canal RUN #23 WEIR NAME 1'' 0tSFil44,0E No Deliveries 26 Riddle 36 EVWD Canal Loss Tot Canal Filename: 2013-2014 Delivery Schedule.xlsx Last Revised 3/2612013 BVM 12 3 Calvary 10 260 17 M. Allen 7 43 17 Ciriel 2 360 18 Pavilch 11 36 EVWD 260 I ... TOTAL WEIR Canal Loss 40 Tot Canal 376 TOTAL RUN #22 TOTAL DEL'Y WEIR NAME DEL'Y 7h Ijjga sm 45 No Deliveries 5 15 260 40 376 TOTAL DEL'Y 2 Wattenbarger 5 14 Wright 10 18 Wright 15 36 EVWD 260 32-0 Canal Loss 40 Tot Canal 330 RUN #24 I ... TOTAL WEIR NAME DEL'Y Im 10 3 Calvary 10 260 13 Kiel 75 40 34135 LaTourette 25 32-0 36 EVWD 260 Canal Loss 40 Tot Canal 410 Page 4 Production Staff Copy NORTH FORK CANAL ZANJERO DELIVERY SCHEDULE 2013-2014 RUN #25 TOTAL WEIR NAME DEL'Y RUN #26 IM —L iW1198"MIMM WEIR NAMEJ'M,54 I'MGM RUN #29 M. Allen TOTAL I Arnott 45 00411.51,1110 i' 141 tai 10 Kiel 75 22 Christiansen 12 36 EVWD 260 EVWD Canal Loss 43 Tot Canal 435 RUN #27 TOTAL WEIR NAME DEL'Y NAME DEL'Y 1 Arnott 45 36 EVWD 260 46147 Valencia Lea 84 53 Smith 3 Canal Loss 43 Tot Canal 435 RUN #29 M. Allen TOTAL WEIR NAME DEL'Y 18 Pavlich I Arnott 46 1 Cagle 5 41 Tot Canal 36 EVWD 260 Canal Loss 40 Tot Canal 350 RUN #31 I ....... ............................ TOTAL WEIR NAME DEL'Y 36 EVWD Canal Loss Tot Canal 40 300 22 Christianson 36 EVWD Canal Loss Tot Canal RUN #28 WEIR NAME TOTAL DEL'Y 12 260 43 435 TOTAL DEL'Y 17 M. Allen 8 17 Ciriel 1 18 Pavlich 10 36 EVWD 260 Canal Loss 41 Tot Canal 375 RUN #30 TOTAL WEIR NAME DEL'Y No Deliveries 36 EVWD 260 Canal Loss 40 Tot Canal 300 I ....... . Filename: 2013-2014 Delivery Schedule.xlsx Last Revised 3/26/2013 SVM Page 5 Production Staff Copy NORTH FORK WATER COMPANY A California Corporation) FINANCIAL STATEMENTS JANUARY 31, 2013 North Fork Water Company A California Corporation) Index January 31, 2013 Schedule Page Organization Data 1 Independent Accountants' Review Report 2 - 3 Statements of Financial Position 4 Statements of Activities 5 Statements of Changes in Shareholders' Equity 6-7 Statements of Cash Flows 8 Notes to Financial Statements 9-11 Supplementary Information Schedule of Property, Plant and Equipment, and Accumulated Depreciation One 12-13 Schedule of Shareholders Two 14 Statement of Financial Position Comments Three 15-16 North Fork Water Company A California Corporation) Organization Data January 31, 2013 DATE AND STATE OF INCORPORATION DURATION OF CHARTER NATURE OF BUSINESS 1885 - California Perpetual Existence Water Company Located in Highland, California DATE OF EXEMPTION LETTER OFFICERS Arnold L. Wright Ronald Arnott Brian Tompkins Justine Hendricksen Matt LeVesque James Morales, Jr. Kip E. Sturgeon IUT- fin& ii;l:7 September 13, 1964 President Vice President Treasurer Secretary George E. "Skip" Wilson Margaret Wright Under Agreement with East Valley Water District 1 VLF Van lant & Fankhanel, LLP 1 Corti fled Public Accountants 1— INDEPENDENT ACCOUNTANTS' REVIEW REPORT Board of Directors North Fork Water Company (A California Corporation) 3654 E. Highland Avenue, Suitel8 Highland, California 92346 We have reviewed the accompanying statement of financial position of North Fork Water Company (a California Corporation) as of January 31, 2013 and the related statement of activities and changes in shareholders' equity and cash flows for the year then ended. A review includes primarily applying analytical procedures to management's financial data and making inquiries of Company management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements. Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report. Based on our review, with the exception of the matter described in the following paragraph, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. Van Lent & Fankhanel, LLP 25901 Kellogg Street Loma Linda. CA 92354 909.856.6879 As indicated in the AICPA's Audit & Accounting Guide for State and Local Governments, and also in the AICPA's Audit & Accounting Guide for Not - for -Profit Entities, entities are considered governmental" if there is "appointment (or approval) of a controlling majority of the members of the organization's governing body by officials of one or more state or local governments." If an entity is considered governmental, it is subject to generally accepted accounting principles for state and local governments. Based on the above definition, North Fork Water Company would be considered a governmental agency, and should follow reporting standards of the Governmental Accounting Standards Board (GASB). However, the accompanying financial statements were prepared in accordance with the Financial Accounting Standards Board Accounting Standards Codification, rather than the GASB standards. The effects of this departure from accounting principles generally accepted in the United States of America on financial position, results of operations, and cash flows have not been determined. Our review was made primarily for the purpose of expressing a conclusion that there are no material modifications that should be made to the financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. The supplementary information included in the accompanying Schedules 1, 2 and 3 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the inquiry and analytical procedures applied in the review of the basic financial statements, and we did not become aware of any material modifications that should be made to such information. 1My Wt ii), March 28, 2013 North Fork Water Company A California Corporation) Statements of Financial Position January 31, 2013 For Comparative Property, Plant and Equipment Improvements - Fencing 2,840 2,840 Canals and Pipelines 2,762,355 2,762,355 Less: Accumulated Depreciation (300,349) (246,264) Total Property, Plant and Equipment 2,464,846 2,518,931 Other Assets Notes Receivable - Due After One Year Purposes Only) Water Rights - January 31, 1952 2013 2012 ASSETS 655,611 659,770 Current Assets 3,254,385 3,298,269 Cash 84,105 68,946 Cash - Restricted for Capital Projects 23,887 23,887 Prepaid Expenses 17,649 18,012 Receivables 110 11 Assessments 4,041 4,017 Interest 87 546 Notes - Due Within One Year 4,159 4,160 Total Current Assets 133,928 119,568 Property, Plant and Equipment Improvements - Fencing 2,840 2,840 Canals and Pipelines 2,762,355 2,762,355 Less: Accumulated Depreciation (300,349) (246,264) Total Property, Plant and Equipment 2,464,846 2,518,931 Other Assets Notes Receivable - Due After One Year 4,159 Water Rights - January 31, 1952 655,611 655,611 Total Other Assets 655,611 659,770 Total Assets 3,254,385 3,298,269 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable 1,841 2,505 Accrued Liabilities 110 11 Income Taxes Payable 1,600 Total Current Liabilities 3,551 2,516 Shareholders' Equity Capital stock authorized 7,200 shares - 7,156 issued and outstanding at $100 stated value 715,600 715,600 Additional Paid -in Capital 562,704 574,730 Contributed Capital 1,759,846 1,797,692 Retained Earnings 212,684 207,731 Total Shareholders' Equity 3,250,834 3,295,753 Total Liabilities and Shareholders' Equity 3,254,385 3,298,269 The accompanying notes are an integral part of these statements. See accompanying independent accountants' review repot 2 North Fork Water Company A California Corporation) Statements of Activities For the Year Ended January 31, 2013 Revenues Water Sales Expenses Repairs and Maintenance Salaries Payroll Taxes Insurance Property Taxes Accounting Fees Depreciation Directors' Fees Office Supplies Total Expenses Loss from Operations Other Income Penalties Interest Total Other Income Income Before Provision for Income Taxes Provision for Income Taxes State Income Taxes Excess of Expenses Over Revenues Before Contributions Contributions East Valley Water District Shareholder Assessments Change in Equity 2013 37,154 750 63 3,975 38,744 1,800 54,085 50 136,667 136,667) 333 136,334) 1,600 137,934) 93,015 L _L44.9191 For Comparative Purposes Only) 2012 43,892 750 62 4,043 39,438 1,850 54,084 25 144,189 144,189) 31 480 143,678) 827 144,505) 93,028 L __L51.4771 The accompanying notes are an integral part of these statements. See accompanying independent accountants' review report. 5 January 31, 2013 Balance, January 31, 2012 Shareholder Assessments Excess of Expenses Over Revenues Allocate Depreciation Balance, January 31, 2013 North Fork Water Company A California Corporation) Statements of Changes in Shareholders' Equity For the Year Ended January 31, 2013 Page 1 of 2 93,015 93,015 137,934) (137,934) 12,026) (37,846) 49,872 - 715.600 —L-2L2 .704 $ 1.759.846 $ 212.684 $ 3.250.834 The accompanying notes are an integral part of these statements. See accompanying independent accountants' review report. 6 Cumulative Common Shares Additional Excess of Issued and Paid -in Contributed Revenue Over Outstanding Capital Capital Expenses Total 715,600 574,730 1,797,692 $ 207,731 $ 3,295,753 93,015 93,015 137,934) (137,934) 12,026) (37,846) 49,872 - 715.600 —L-2L2 .704 $ 1.759.846 $ 212.684 $ 3.250.834 The accompanying notes are an integral part of these statements. See accompanying independent accountants' review report. 6 North Fork Water Company A California Corporation) Statements of Changes in Shareholders' Equity For the Year Ended January 31, 2013 Page 2 of 2 January 31, 2012 (For Comparative Purposes Only) Excess of Expenses Over Revenues (144,505) (144,505) Allocate Depreciation (12,026) (37,846) 49,872 - Balance, January 31, 2012 $ 715,600 $ 574,730 $ 1.797.692 $ 207.731 $ 3,295.753 The accompanying notes are an integral part of these statements. See accompanying independent accountants' review report. 7 Cumulative Common Stock Additional Excess of Issued and Paid -in Contributed Revenue Over Outstanding Capital Capital Expenses Total Balance, January 31, 2011 $ 715,600 586,756 1,835,538 $ 209,336 $ 3,347,230 Shareholder Assessments - 93,028 93,028 Excess of Expenses Over Revenues (144,505) (144,505) Allocate Depreciation (12,026) (37,846) 49,872 - Balance, January 31, 2012 $ 715,600 $ 574,730 $ 1.797.692 $ 207.731 $ 3,295.753 The accompanying notes are an integral part of these statements. See accompanying independent accountants' review report. 7 North Fork Water Company A California Corporation) Statements of Cash Flows For the Year Ended January 31, 2013 Cash Flows From Operating Activities Cash Paid to Suppliers and Employees Interest Received Penalties Received on Assessments Income Taxes Paid Net Cash Used by Operating Activities 2013 For Comparative Purposes Only) 2012 82,784) $ (94,411) 792 107 31 827) 81,992) (95,100) Cash Flows From Financing Activities Contributions from Shareholders to Pay Suppliers /Employees 92,991 92,989 Contributions from Shareholders to Aid Construction - - Repayment of Loans from East Valley Water District 4,160 Net Cash Provided by Financing Activities 97,151 92,989 Cash Flows From Investing Activities - (26,205) Net Increase (Decrease) in Cash 15,159 (28,316) Cash, Beginning of Year 92,833 121,149 Cash, End of Year $ 107,992 $ 92,833 Non -Cash Financing Activities Construction in Progress $ $ Proceeds of Loan Payable from EVWD Additional Paid -in Capital Reconciliation of Excess of Expenses Over Revenues Before Contributions Excess of Expenses Over Revenues 137,934) 144,505) Adjustments: Depreciation 54,085 54,084 Increase) Decrease In: Prepaid Expenses 363 252 Interest Receivable 459 373) Decrease) Increase In: Accounts Payable (565) (4,558) Taxes Payable 1,600 Net Cash Used by Operating Activities _L _L81.9921 $ (95,100) The accompanying notes are an integral part of these statements. See accompanying independent accountants' review report. 8 North Fork Water Company A California Corporation) Notes to Financial Statements January 31, 2013 NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations North Fork Water Company is a mutual water company. The Company's primary purpose is to secure surface water from the Santa Ana River and other available sources for delivery to its shareholders in accordance with its delivery schedules and rules and regulations. Depreciation of Plant and Equipment The carrying values of plant and equipment are depreciated over the estimated useful lives of the assets using the straight -line method. Provision for Income Taxes The Company is exempt from federal income taxes under Section 501(c)(12) of the Internal Revenue Code. Therefore, no provision for federal income taxes is reflected in the financial statements. State franchise tax is computed at the current corporate rate. For the fiscal years ended January 31, 2013 and 2012 state franchise taxes were $800. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, the actual results could differ from those estimates. Cash and Cash Equivalents For purposes of the statement of cash flows, the North Fork Water Company considers cash and cash equivalents as short term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents have an original maturity date of three months or less from the date of purchase. 0 North Fork Water Company A California Corporation) Notes to Financial Statements January 31, 2013 NOTE 2 - RELATED PARTY TRANSACTIONS As of January 31, 2013, East Valley Water District owned 82% of the outstanding shares of the Company. The Company and East Valley Water District have certain officers and directors in common. East Valley Water District performed substantially all of the repairs and maintenance of the Company s water distribution system. NOTE 3 - PROPERTY, PLANT AND EQUIPMENT A summary of changes in property, plant and equipment follows: Canals Canal Replacement Canals - %2 interest Ditch Diversion Boxes Pipe Line Improvements Fencing Total Canals Canal Replacement Canals - V2 interest Ditch Diversion Boxes Pipe Line Improvements Fencing Total Balance January 31, 2012 2,668,108 $ 67,610 4,729 21,909 2,762,356 2,840 2,765,196 $ Balance January 31, 2011 2,641,903 $ 67,610 4,729 21,909 _ 2,736,151 2,840 Balance Deletions January 31, 2013 2,668,108 67,610 4,729 21,909 2,762,356 Additions 26,205 $ 26,205 2,738,991 $ 26,205 $ 10 2,840 2,765, 196 Balance Deletions January 31, 2012 2,668,108 67,610 4,729 21,909 2,762,356 2,840 2,765,196 North Fork Water Company A California Corporation) Notes to Financial Statements January 31, 2013 NOTE 4 - REPAIRS AND UPGRADES East Valley Water District (District), on behalf of the District and the North Fork Water Company Company), applied for and received a FEMA Hazard Mitigation Grant to realign and bury sections of the North Fork Canal that were exposed to, and at risk from, debris, landslides, flooding and earthquake. Total eligible costs under the grant were $5,514,391, including $4,135,793 in FEMA funds earmarked for the project, and a requirement that $1,378,598 in local matching funds be provided. The project was completed in April 2009 at a total cost of $4,987,184. FEMA grant funds reimbursed 3,784,614 of this amount, with the remainder of $1,202,570 to be split equally between the District and the Company. Accordingly, the Company's obligation for costs of the project was $601,285. NOTE 5 - ANNUAL SHAREHOLDER ASSESSMENTS Annual shareholder assessments were set at $13.00 per share for the year ended January 31, 2013. NOTE 6 - NOTES RECEIVABLE In August 2009 the Company received Promissory Notes from two shareholders, representing 146.50 shares, in lieu of payment of the $83.51 per share special assessment. Terms of the Notes are five years with interest accruing at 5% on the unpaid balance. Payments are due annually on August 21 ", with the final payment due August 21, 2014. The balance on the Notes Receivable at January 31, 2013 is $4,159. NOTE 7 - SUBSEQUENT EVENTS In the preparation of these financial statements, the Company considered subsequent events through March 28, 2013, which is the date these financial statements were issued. 11 SUPPLEMENTARY INFORMATION 4? N V3'' p • M O N N O l— oo O N o0 0o rn 06 W ' N o In " fiD ' rO " O M O M O b9 A p N V1 ON o oro vNi m O 69 b9 O M. a N O 7 0c N oo E O vt O N Q 69 Le OA y W M O 04 oo O O N N Vl M C' .-' 01 O ' n 7 0 ol3 wpa N N N LO W b 69 FL! O W 9 d W O C y W N O m w .• co . O N h O O O bo t•" O V p C a U b G N h .. M V T O Vl 7 O1 p oc \ O l- O V T O O W N M 00 7. itl r 7 w r 00 ON M M O N N vl M 7 N n r 9 LO f N N N 0. O Lal . U Vl N N O N CD O01 N N 00 7, N O d wa7 m V i N O • • ` O xi ' V i O '" d p UUL1auu U Cavaa0InAUmO G1ti N d N 7 0OO O 69 sA O O t- V1 O\ O O\ ON O\ O N 7 vl a\ V W . r-- i M co VN1 W O 7 vMi vii 69 69 OQj ud n .. N h O\ V O\ 00 O y D\ 7 h O\ qt 00 CN 00 Iw W N. b N N O o CD es rddO boAA N t o+1 tm+l 0 On C d b 0 y Otl M QI V 3 a M 3 ed 7 b M b D\ M N b N a W % A N N N Aw to O O\ O v 00 O lq a h O Obi O L a 69 4 a0 LO N a 0 T mm O O O N O N N N N fl Qi uu qb W rrg9' w N - etl ry a xi N V i O d pp w N pN gMF i FGN OPi O U UAaUUa v' a" aw 0CNwaU AAQ M. North Fork Water Company A California Corporation) Schedule of Shareholders January 31, 2013 Shareholder Eugene Abbott Amott Poulty Ranch Amott Brothers Enterprises Gailen & Helen Amott William Buster Brucie Cagle Calvary Chapel Robert & John Christianson Richard Christianson East Valley Water District Mark Allen Nigel C. Smith Jose Gutierrez Thomas Hooker Robert Hooker First American Title Garland Kemper Elizabeth Kiel Ross & Judy Jones Fred McNeal McNeal, Duckworth & McNeal, Inc. Ray Merritt Beverly Rich Luis E. & Jacqueline R Curiel Wallace Wattenberger The Wright Family Trust Yucaipa Valley W. D. Total See accompanying accountants' supplementary report. 14 Schedule Two Number of Shares 4.00 138.00 55.00 66.67 8.00 4.00 72.50 48.00 3.00 5,874.49 8.50 3.00 9.00 17.00 17.00 36.00 50.00 143.00 30.00 43.20 6.80 2.00 5.00 3.50 5.00 465.67 37.67 7,156.00 North Fork Water Company A California Corporation) Statement of Financial Position Comments January 31, 2013 CURRENT ASSETS Current assets consisted of the following: Cash Citizen Business Bank - Checking Prepaid Insurance Prepaid Taxes Assessments Receivable Interest Receivable Note Receivable - Due Within One Year Totals WATER RIGHTS 2013 107,992 1,649 16,000 4,041 87 4,159 Schedule Three Page 1 of 2 2012 92,833 1,667 16,345 4,017 546 4,160 133,928 $ 119,568 There is an agreement dated May 23, 1895, between North Fork Water Company and Bear Valley Land and Water Company (now Bear Valley Mutual Water Company) that provides for delivery to water to North Fork Water Company as follows: Month Day Inches June 500 July 600 August 600 September 550 October 450 November 400 December through May Flow of Santa Ana River at a point known as The Divide" The water deliveries in the period June through November may be reallocated between months, but no more than 600 day inches are to be delivered in any one month. Water rights, as summarized above, have been valued at $655,611, which is the difference between the par value of the capital stock outstanding and the value of the remaining assets at January 31, 1952. See accompanying accountants' supplementary report. 15 Schedule Three Page 2 of 2 North Fork Water Company A California Corporation) Statement of Financial Position Comments January 31, 2013 PROPERTY, PLANT AND EQUIPMENT A summary of property, plant and equipment, and accumulated depreciation is shown in Schedule One. The value of the one -half interest in canals was the appraised value in 1940, with subsequent additions being valued at cost. The provision for depreciation amounted to $54,085 computed at established rates using the straight -line method. CURRENT LIABILITIES Current liabilities consisted of the following: Accrued Liabilities Accounts Payable Accrued Liabilities Income Taxes Payable Totals 16 2013 2012 1,841 110 1,600 2,505 11 3,551 $ 2,516 NORTH FORK WATER COMPANY Budget Justifications Fiscal Year 2013 -14 F- 1vi=3NAl O61.1M1Oi;1110 Assessments are levied equally on the 7,156 outstanding NFWC shares. Amount of the total assessment is determined by estimating the operating and capital expenditures that will be needed for the coming fiscal year, and then dividing by 7,156. For 2013 -14, staff is proposing an assessment of $13 per share for total assessment income of $93,028. OPERATING EXPENDITURES REPAIRS AND MAINTENANCE Contracted Labor — EVWD East Valley Water District employees manage all aspects of North Fork Water Company's operations. Charges to the company are based on actual hours dedicated by EVWD employees at their regular rates plus 57% burden for benefits. Time is charged by the following employees: Production — inspection and operation of valves Field Maintenance — removal of sand form intakes; repairs to plunge creek siphon Finance - maintain ledger and prepare schedules and statements for year -end reporting o Administration — prepare shareholders notices and send out assessments Contracted Labor - Other— Repair turnout valves as necessary. Specialized contractors are used for this work due to the age of the valves. Cost ranges from $300 -$500 per valve. Also, North Fork facilities are part of District's new landscape contractor's monthly work, accordingly, charges associated with those facilities are paid by NFWC. SALARIES & PAYROLL TAXES This item consists of monthly payments to Arnold Wright of $62.50. As these payments are treated as salary, payroll taxes are withheld and remitted to the appropriate governmental agencies. INSURANCE Property and Liability insurance on NFWC facilities is provided through the District's coverage with the Special District Risk Management Association. PROPERTY TAXES This item consists of two assessments by the County of San Bernardino. The first is on real property with a value of $123,094. The second is on pipeline improvements, whose value increased significantly due to the FEMA funded project completed in 2009 — the assessed value of those improvements is 2,894,607. NORTH FORK WATER COMPANY Budget Justifications Fiscal Year 2013 -14 CONTRACTED ACCOUNTANTS The NFWC accounting records are reviewed by an independent public accountant. A review effort is substantially less in scope than an audit, and costs substantially less. Staff contracts for this work with the accounting firm that performs the audit for East Valley Water District, as it is believed that a familiarity with the District's accounting procedures and staff allow for efficient and cost effective work for NFWC. CAPITAL EXPENDITURES These expenditures consist of major repairs / replacement of NFWC facilities that significantly add to the useful life of fixed assets. Projects included in the NFWC Capital Improvement Plan for the next 5 years include: Lining of the Plunge Creek Siphon This project is not included in the 2013 -14 proposed budget. Staff will solicit bids for the work and include a recommendation and proposed increase in assessments, if necessary, in a future Capital Budget NORTH FORK WATER COMPANY Proposed Operating Budget - Cash Basis Fiscal Year 2013 -14 Shareholder Assessments Operating Assessments Reserve for Repairs / Replacements Operating Expenses Contracted Labor - EVWD Contracted Labor - Other Supplies Salaries Payroll Taxes Insurance Property Taxes Contracted Accountants Director Fees Miscellaneous Operating Expenses (Excl Depreciation) Other Receipts (Expenditures) Interest and other charges State Income Tax Cash Receipts Over (Under) Expenditures 2011 -12 2012 -13 2013 -14 Actual Actual Proposed 93,028 93,015 93,028 93,028 93,015 93,028 43,892 37,154 39,000 5,200 45 46 150 750 750 750 62 63 70 4,043 3,975 4,050 39,438 38,744 39,500 1,850 1,800 1,900 25 50 50 80 90,105 82,582 90,750 511 333 150 827) (800) (800) 316) (467) (650) 2,607 9,966 1,628 Annual Depreciation Expense 53,560 54,084 54,085