The Board meeting in July included a report by MC Engineering. This is the firm that is assisting the water company in the pursuit of a long
term, low interest loan from the US Department of Agriculture, to cover a great portion of needed infrastructure improvement. Recalling that a portion of the water piping network was installed in the 1960s – 70s, there is a need to move those residential lines from the rear of the properties out to the utility right-of-way, improve fire suppression capability and to complete the system with electronic water meters. I would encourage you to go to our website: blsmwc.com and listen to the
audio of our Board Minutes which includes the presentation. It is excellent.

Office Facility Acquisition

As I mentioned last month, negotiations were continuing for the purchase of the empty Rabobank, where our office is currently
located. I am happy to report that we have reached an agreement with Rabobank and are entering the escrow process. The property is a
known facility as we have occupied the building for over 3 years. A number of our customers asked why we didn’t look at residential vacancies, for
an office, in the BLS neighborhoods. Well; we did. The Board decided to stay in the Arnold commercial area and support the town. More importantly, the facility has easy, year
round access and is near other well visited businesses, including the Post Office, which is next door. We are very pleased that the facility purchase is on its way to becoming part of our inventory. Looking into the future, we are exploring the option of renting space to a Bank, a Utility Company, Governmental Services, or any company/service that regularly serves the Arnold area and is in need of office space. Monies generated from rental income would pay for the facility.

Well # 4

A new well has finally come on line. After searching the Arnold area for new well sites, we will now deploy the effort of our limited success. Well #4 will provide up to a 30 – 35% increase in water flow now provided by Wells 2 and 3. This will allow us to cut back on the demand of what we call our ‘super well’, or Well #3. The path to this point was a long time coming, especially after a comprehensive search for developable well sites that was met with depressing results. The engineers that worked with us on the Well conclude that we should enjoy 35 – 45 years of service, or until 2051-2061. Then it will be someone else’s turn!

Meters

The march to meters continues. We are continuing to gather monthly use information, down to the number of people using water, from 60 different residences, full and part-time, with the goal of developing a base rate and a consumption use schedule. These are two very common factors used by water companies in the billing process. This study will conclude in a month or two. The garnered information will be invaluable in reaching a desired and fair threshold. Meanwhile we are continuing to install meters and replace out of date meters. Meters that are not capable of electronic monitoring are being replaced.

A Recent Mail Ballot
Recently, every shareholder was asked to vote on a matter that had to do with the number of members on the Board of Directors. Originally the Board member size was three. As BLS added properties, the Board was expanded to seven. Wells Fargo Bank was doing their due process on a loan application and discovered a discrepancy in our reporting of the Board’s number change to the State of California’s Secretary of State. The same question was raised by the US Department of Agriculture. No where in the Company’s files was there any indication that this matter was properly attended to and reported to the state as required. We are assuming that this number change occurred in the 1970s. We explored the required, corrective options. One major option was ruled out: Have the Board do it. The Board lacks the authority under the Corporation’s Bylaws. In fact the only option available to us, after a fair amount of legal research was to go to the vote of the rate payers. We did as the rule compelled and are moving on.

Water Conservation

Everyone realizes that the drought is NOT over but some are using water like it is. Conservation is still important and must be
practiced. You have answered the call over the past couple of years and I assure you, in the strongest terms, the time to continue conservation is still NOW. Those that predicted the El Nino weather pattern for 2015 -16 are now saying that we should expect La Nina, or a dry winter, in 2016 – 17. Do the right thing ….. SAVE water!

Thank you,
Bob Maginnis
President

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