Annual Shareholder’s Meeting 4/10/19

Kays Creek Irrigation Annual Shareholder’s Meeting
4/10/19
6pm
Layton City Council Chambers

Welcome: Clark Hirschi

Minutes read by Joanna Stowell

Reconstruction of Gordon Avenue to Emerald: we will put in new pipe as we did on the lower part of Gordon last year. Work has been done at Hobbs Creek Dam. The trackhoe has been up to pull timber off the face of the dam as required by the state. Drains need to be reconstructed and redone at outlet of Hobbs Dam so they don’t leak underneath. We will redo the grate on the outlet. The State is happy with what we have done with the dam. We sent pictures of the work done and made sure that the trees and roots were sprayed. We didn’t finish the work on the bubblers last year because Rocky Mountain power was slow getting power in; we had to upsize to a 3 volt phase electrical system. The transformer was going to cost $15,000 but because we gave Rocky Mountain Power an easement they cut $9,000 off the cost and we paid $6,000 for the line and the transformer. We built a shed for the compressors to run the bubblers. Davis County Rescue uses Andy Adams to practice search and rescue procedures and they have said they would help us set the lines. Fish and Game will bring their boats to help install the bubblers as well. 3 bubblers will be installed that will mix and stir the water in Andy Adams. Scouts want to use the work at the reservoir as Scout projects which will help with donated labor. We will put sandbags filled with cement to stop the air lines from rising. Utopia caused a lot of trouble. They hit some of our lines. We were worried about our big one on Cherry, because they hit a gas line there, but it was loaded today and looks good. We have repaired the ones we know about, but since the lines are empty in the winter, some we will find when the water is turned on.

Questions

Question from Geni Hyde: How will the Hydes get water if Ralph Firth is no longer the ditch master?

Steve: The ditch will still be active so the service will continue as other people also use the ditch. The new ditch master will make sure that water gets to all users. That is how we anticipate that water will continue to be provided to that ditch.

Question from Geni Hyde: How much will it cost to bring pressurized secondary water to the Hyde’s property?

Steve: Cost estimates were provided based on past city projects of a similar nature:
An 8-inch line 1500 feet down the road: asphalt, restoration, etc., $187,000
A 24-inch water line down Church Street would be $270 per foot for a total of $405,000.

There is potential for development for the Ute Knowlton property. There is no timeline for this, just interested developers. If that does happen in the future, the developer will be required to bring the water to the south toward the property and run it across their frontage. That will help to offset the cost.

Tom Day’s questions were all answered by the paperwork provided.

Question from Suzanne Flinders: How is insurance accounted for at the end of the year for tax purposes?

Joanna: We provide a reimbursement for insurance costs for two of our employees. As it is a reimbursement it is not taxable income and does not need to be reported and is not included on a W2. I file the W2’s for the company, which are due January 31 every year as well as form 943 which is due then as well.

Question from Suzanne Flinders: Does the company have a CPA?

Joanna: No, the company does not have a CPA.

Question from Suzanne Flinders: How many customers are out west? What are they charged?

Joanna: There are around 500 customers out west. Layton City holds the shares for the water that they use. They are charged the same rate as all others. The board has made the decision that everyone pays the same amount.

Question from Suzanne Flinders: Who is getting the money and where is the water coming from?

Joanna: The water goes to the company and is used for repairs and the needs of the company. Layton City is the shareholder and the water for out west comes from Andy Adams.

Question from Suzanne Flinders: Why are the minutes late getting on the website?

Joanna: The company bylaws require that the minutes be typed up and ready for viewing at the office within a 3-5-day timeframe. They are typed up within that timeframe. The bylaws don’t mention the website because that is something that we created in the last few years as a payment method and a good faith effort to communicate with the shareholders.

Question from Suzanne Flinders regarding the billing schedule.

Joanna; Pressurized users pay in the spring. Ag users pay in the fall. We had an issue with some ag users paying 2 to 3 months late and so the board moved them onto the spring billing in order to have some leverage for payment.

Question from Suzanne Flinders: Why were water rates raised?

Scott: Our plan was not to; we hadn’t raised rates in 5 years, but as we looked at the financial side of things we realized that we couldn’t make payroll or our obligations to the State. This would make us solvent. We have been using the connection fees brought in from new subdivisions to carry the company but that is not a steady source of income. Clark: Without the connection fees we would have had to raise rates years ago.

Question from Suzanne Flinders: Are all new homes metered? Is Jon Green’s home metered?

Scott: All new subdivisions are metered. Clark: By State law. Scott: There is a new law that they are trying to pass that everyone will be metered, even farmers. I estimated the cost at $5 million. That would have to be stretched out to all customers and shareholders. The way the law is written, the state would provide grant money that would have to be paid back, so its not really grant money. Jon Green’s home will be metered. Weber Basin ordered 1000 meters last year that put all other orders back 6 to 8 weeks. We have a meter now for him and it will be installed. Jon Green paid all upfront costs for water to his new home. Kays Creek did not have to pay for any of it.

Question from Suzanne Flinders: Why are people who are delinquent in their payments still able to use water?

Scott: 2 years ago we had 600 who hadn’t paid right when water was being turned on for everyone. We don’t have the time or man power to shut people off while also loading lines and dealing with breaks that occurred over the winter. Most companies don’t shut off utilities until accounts are 2 months delinquent. People who are delinquent are shut off, but people do turn their water back on after we shut them off. When we find out, we shut them off again and fill up the valve with road base, but we’ve had people take the road base out, turn the valve back on, and put the road base back in. If we do the transfer with Layton City, they will do the billing. Secondary water will be on the monthly bill for pressurized customers, not farmers who will still be billed in the fall, and if they do not pay the bill then their culinary water will go off. We are still in negotiations with the City. We have had several meetings. We are working to make it equal and fair. David Wright has been very helpful and we have had consultants advise as well. We can back out at any time if we feel the process toward an agreement isn’t working.

Question from Suzanne Flinders: Why aren’t action items from board meetings followed up on?

Scott: I don’t know. We need to figure that out.

Question from Suzanne Flinders: Can board members names and telephone numbers be put on the website? Can the bylaw be put on the website?

Scott: No. The board members do not want their names and numbers on a public website. That information is at the office and anyone who wants it can call the office number. The same with the bylaws. They are on file at the office and you can call and come by for a copy at your expense.

Question from Colleen Mitchell(??) (This shareholder did not identify herself at the mic.)
Where are we with an audit? That question was partially answered with the 600 number.

Clark: Just to clarify, the 600 customers who had not paid was at the beginning of the year, when water was turned on. By the end of the year we were down to a couple dozen. We don’t want to give people free water.

Question: Do we have a running list of who has water shares?
Scott: We are trying to figure that out. We are looking at the old records and need to talk to different people to determine that. Some people in east Layton never had water shares, they had water out of the old canal. *Invitation to Patty Brown to talk to Scott after the meeting.* We are trying to clean up the books.

Question: The house to the south of me has an exposed ditch. Whose responsibility is that?

Scott: That homeowner has paid to hook on. He has an easement through the ditch to take water back. We will get after him to decide what he was going to do.

Question: Who owns the ditch?

Scott: The lady up above you who owns the horses.

Clarification questions from Geni Hyde: (She read from previous meeting minutes regarding Hyde’s getting water from Davis-Weber, meeting with Church Street residents a to discuss water a possibility if they understand they have to pay the connection fee.) A petition has been signed to have water brought to Church Street. The church and the trailer park as well as others are very interested. Can a meeting be held with them?

Scott: They can meet with the board of directors but they need to understand the cost. We were originally going to bring the water down to Ralph Firth but he decided he didn’t want it.

Geni Hyde: And you didn’t realize that we were farther down and so we kinda were cut off.

Scott: No, we didn’t realize you were there but we didn’t cut you off. Our ditch ended at Ralph Firth’s. One side of the road had the Kays Creek ditch and the other side of the road were accessing the Davis-Weber ditch.

Can you provide a copy of the petition? Email it to Joanna.

Question from unidentified man: Talk about the metering idea. It doesn’t seem cost effective.

Scott: Metering can be very helpful. It helps to conserve water by helping people see what they are using. One man in west Layton hooked on in June and used his allotment by September. Metering gives us the ability to keep track, cut off, and recharge people who overwater. There are lots of people moving to Utah and this is using a lot of resources. The flood days are leaving the area. Pressurizing the system saves 35% of the water.

Steve: Weber Basin has been a forerunner in this area and they have seen a 35% decrease in water use simply by adding a meter and allowing people to see what they are using. Their system does an hourly read and users can access their website and see what they are using and what the need is for water on a given day. There is a huge decrease in the use of water and people find they have more healthy landscapes when they don’t overwater. Saratoga Springs had a system installed that was supposed to be a 40-year watering plan and they exceeded their capacity in 15 years because they didn’t have meters installed. They have metered their system now and don’t have those problems.

Todd Nielson: Do most people use too much water?

Steve: The majority of water users use 35% more water than they need based on the data.
Clark: The State of Utah is requiring meters on every new home and some interpretations of the law require every home to be metered. That isn’t being enforced now but if it is, we will not be able to afford it. It will put the company under. We are trying to find other ways to pay for the metering such as grants. We aren’t advocating metering one way or another but the State is tying our hands regarding metering and replacing old infrastructure. In the future this will be an issue as much as for your state representative or congressman as it is for us because if it becomes law, we will have to comply.

Norma Cox: How much on a meter of water do they get?

Scott: If you have 10 shares, you will be allowed to use that much water. I don’t think you’ll have a problem with it. The meters would have to be monitored.

Norma Cox: You can’t control runoff.

Scott: The meters would probably help with two things. When you see runoff, turn off the water until it soaks into the ground. Metering helps us be more aware of water use. 20-30 years from now, how much farmland will be left?

Clark: We invite all shareholders to meet with the board if you have questions that weren’t answered or further concerns. Contact Joanna and let us know. We want to be responsive so please communicate with us.

Meeting closed at 6:40 pm

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