Shareholders,

I mentioned before that you would get tired of hearing me say this but “Thanks for continuing to conserve.” The December rains made a dent in the water supply but its impact was very small. Let’s hope the rains come back and continue. Rain translates to snow pack and snow pack means water supply replacement.

The water company continues to seek a grant writer. This is a very limited field but we are getting a number of responses. Proposition 1 that passed in the last California state general election, contains over $7.5 billion in grant funds for a number of categories that pertain solely to water. The “rules of engagement” for application have yet to be articulated as to who will or will not qualify. In fact, the general obligation bonds that will provide the revenue stream have yet to be sold. We intend to be prepared in advance when the application process is announced. Additionally, we are looking into the State of California’s discretionary fund. These are monies set aside for worthwhile projects and carry an extremely low interest rate, generally lower than 2%.

We will actively pursue both avenues with the goal of securing funding for a number of water company projects that include: complete metering of the entire system and replacement of BLS neighborhoods that have the original 1960s piping running through rear yards. The new improvements would relocate the water service to an area in front of the dwelling, out near the public utility right-of-way and would include additional fire hydrants. Another improvement project would include an over haul of our Water Treatment Plant. Aging equipment would be replaced and updated, as well as an increase in our overall capacity to treat water.

BLSMWC continues to engage two adjoining water companies, the Utica Power Water Authority (UWPA) and the Calaveras County Water District (CCWD) for purposes of negotiating a contract to purchase surface water. There has been a recent change in the Board of Directors for CCWD and they have recently hired a new General Manager.
BLSMWC purchased treated water from CCWD for at least 10 years and was cut off three years ago. We had a very fair and workable agreement. We will be seeking a similar agreement. Selling us water is in CCWD’s best interest, as they have to account to the State of California’s Department of Water Resources, as to the status and use they are making of their water rights. This is a “use it or loose it system.” The cost of acquiring CCWD treated water would be somewhat minimal, as there are sufficient connections already in place. At the same time, we are working with our engineers and the staff from UPWA in an effort to determine if it is possible to connect their water to our system. Initial indications show that there appears to be no impeding issues. This option would be costly and would fall into the grant or discretionary funding request arena.

Meanwhile, the well development continues. Mindful that the grant funds maybe at least a year away – if we qualify. There is probably an equal track to pursue discretionary funding and additional water sources are still needed. Remember, we do not have a backup or redundant system to our present wells and one must be developed. A recent test of a new well showed promise and when added to other wells waiting to come on line, we have a total flow of 150 gallons/per/minute (gpm). Our present wells produce about 275/295 gpm. Getting these new wells on the system will be of great help.

Last comment: Big Reminder on Winterizing. PLEASE DO SO. I can assure you nothing is worse than flooding your home due to a split pipe. Drain the pipes and put some 50/50 anti-freeze into the toilets, sinks and drains. You don’t need a lot but you do need the protection.

Visit our website for more info on what’s going on: www.blsmwc.com

Happy New Year!

Bob Maginnis
President of the Board

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