November 6 2019 Board Meeting

Kays Creek Irrigation Company Board Meeting
Layton City Engineering Offices
Start Time: 4:00pm

Present: Scott Green, Joe Love, Jon Green, Clark Hirschi, Steve Jackson, Gary Crane

Motion by Joe Love: Joanna Stowell is made executive director over the Quickbooks Account for Kays Creek Irrigation.
Seconded: Jon Green

Discussion of the Layton City/Kays Creek Irrigation Company Proposal

Kays Creek Irrigation issues to consider:

• Kays Creek Irrigation Company is expanding and picking up more customers.
• The company has reached a point where we either need to transfer infrastructure to Layton City or expand our workforce.
• We lost Robert Sanchez to Hill Field AFB because they could offer him better pay plus insurance. If we are going to keep quality employees, we will need to offer better pay.
• Equipment would need to be purchased in order to take care of line breaks and other infrastructure issues in a timely manner and not rely on hiring subcontractors.
• The lines are aging. The pipes are 60+ years old and made of transite. 95% of KCIC is pressurized. The pipes are the system and KCIC has to be able to maintain the system. The cost of maintenance only grows over time.
• The State of Utah has performed a water audit. Two years ago, a bill was passed requiring every new hookup to be metered. KCIC has fulfilled that requirement with new subdivisions, but the State also wants existing connections to be metered as well to enforce conservation. KCIC is look at $2 million for the meter retrofit.
• The State of Utah owns every drop of water in the state boundaries, but gives out water rights to cities and water companies and establishes beneficial use laws. Because KCIC is using less water (based on pressurization) the issue of forfeiture comes into effect. Forfeiture can occur if the State can prove that an individual or company has not put their shares to beneficial use for 7 years or more, and Weber Basin has already filed on all water rights that fall out because of forfeiture. The water would not come back to the company.

Layton City issues to consider:
• The City has an established secondary water team and can absorb the workload from the KCIC system.
• The City has the equipment and manpower to make repairs on the system.
• By maintaining a secondary water system, the City can use 2/3 of the water outside the house and 1/3 inside the house; the water set aside of culinary use can be used for culinary exclusively instead of for both outside and inside. Every time the City has to go to Weber Basin for more water for culinary use, the price goes up. This agreement would help to stabilize prices over time.
• Water rates would go up to cover the cost of updating and overhauling the secondary system.
• The City does not want to manage the water for ag users. KCIC would retain responsibility for ag water and the reservoirs.
• KCIC water benefits the City and helps the City meet its conservation goals.
• A KCIC – Layton City partnership proves beneficial use of all water in the city limits and eliminates the risk of forfeiture.

Motion: Move forward with the process of the transfer between KCIC and Layton City.
Moved: Clark Hirschi
Seconded: Joe Love

A date and time for an informational meeting will be set and notices sent to shareholders to invite them to come with questions

Scott Green will contact David Wright to work on a letter for the shareholders. Each board member will review the letter, submit questions, and offer insights.

Meeting Closed at: 5:27pm

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