Montezuma Water Company

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TABLE OF CONTENTS

 ARTICLE I

PRINCIPAL PLACE OF BUSINESS

The principal office of the corporation in the State of Colorado shall be located in the County of Montezuma, State of Colorado.  The corporation may have such other office(s), as the Board of Directors may designate, or as the business of the corporation may require from time to time.

The registered office of the corporation may be, but need not be, identical with the principal office in the State of Colorado, and the address of the registered office may be changed from time to time by the Board of Directors.

ARTICLE II

MEMBERSHIP

Section 1:  Any person may apply for membership by written application to the Board of Directors.

Section 2:  All applications for membership shall be acted on by the Board of Directors.  The application shall be on forms provided by the company and shall be accompanied  by payment of  membership and construction fees.  The Directors shall have the authority to approve or deny such application in accordance with its judgment and determination as to whether the supply of water and the capacity of the system is adequate to serve said water applicant in addition to supplying the needs of the existing members of the Montezuma Water Company.  The Board of Directors shall have authority to impose all reasonable conditions upon which an application may be approved and membership granted.

Section 3:  Each membership in the Montezuma Water Company shall entitle that member to one (1) service connection with the Montezuma Water Company’s system.  Any person desiring more that one service connection shall be required to apply for and secure a separate membership for each such connection as provided in Section 2 of this Article.

Section 4:  The rights, privileges and obligations of all memberships in the Montezuma Water Company shall be equal, except as provided in Article 6, Section 5 of these By-Laws.

ARTICLE III

MEMBERSHIP MEETINGS

Section 1: Annual Meetings-  Annual meetings of the members for the election of Directors and for other business which may properly come before the meeting shall be held in Montezuma County, Colorado, or such other place as the Board of Directors may designate, on the first Saturday following the second Tuesday in March of each year.  If the election of Directors shall not be held on the date designated herein for any annual meeting of the members, or any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the members as soon thereafter as may be convenient.  Public notice of the date, time and place, of said meeting shall be given by the Secretary by publication is a newspaper published in Montezuma County, Colorado, having general circulation in said area.  Such notice to be published at least once but not more than thirty (30) days and no less than ten (10) days prior to the date fixed for said meeting and by giving at least thirty (30) days written notice in the United States mail, postage prepaid, addressed to each member at his place of residence, as the same may appear on the records of the Montezuma Water Company, or by delivering such notice personally to the member.  Members shall be permitted to waive such notice in writing, signed by the member entitled to such notice, whether before, at or after the time stated therein and shall be deemed equivalent to such notice. (Amended 2/13/96)

Section 2: Special Meetings-  Special meetings of the members may be called at anytime by a majority of the Directors.  The President shall call a special meeting upon the written petition of at least thirty (30) of the members of the Montezuma Water Company.  Notice of special meetings shall specify the business to be transacted thereat and shall be given as provided in Section 1 of this Article.

Section 3: Quorum-  Fifteen percent (15%) of the total membership of the Montezuma Water Company, present either in person or by ballot, shall constitute a quorum for the transaction of the business at any annual or special membership meeting.  If such a quorum is not present, the meeting may be postponed, provided that such meeting may not be postponed for a period to exceed sixty (60) days for any one postponement (Amended 9/11/01)

Section 4: Order of Business-  All membership meetings of the Montezuma Water Company shall be governed by Robert’s Rules of Order.

Section 5: Voting Rights-  Each member shall be entitled to one vote per membership certificate.  Voting shall be by ballot only.  Cumulative voting shall be prohibited. Ballots shall be received at the company office, 209 Central Avenue, Dolores, Colorado, no later than eight (8) days prior to the annual meeting of the members, by 4:30, Mountain Time.  Ballots submitted after the above date and time shall be considered void. (Amended 9/11/01)

Section 6: Closing of Transfer Book or Fixing of Record Date-  For the purpose of determining members entitled to notice of or to vote at any meeting of the members of any adjournment thereof, or in order to make a determination of members for any other purpose, the Board of Directors of the corporation may provide that the membership transfer books shall be closed for a stated period but not to exceed, in any case fifty (50) days or less than ten (10) days.  If the certificate transfer books are not closed and no record date is fixed for the determination of members entitled to notice of or to vote in a meeting of members, the date on which notice of the meeting is mailed shall be record date for such determination of members.  When a determination of members entitled to vote any meeting of members has been made as provided in this Section, such determination shall apply to any adjournment thereof.

Section 7: Voting Record-  The officer having charge of the membership certificates in the corporation shall make, at least ten (10) days before such meeting of members, a complete list of the members entitled to vote at such meeting of members or any adjournment thereof, arranged in alphabetical order, with the address and the number of certificates held by each.  The list, for a period of ten (10) days prior to such meeting, shall be kept on file at the principal office of the corporation, whether within or outside of the State of Colorado, and shall be subject to inspection by any member for any purpose germane to the meeting at any time during usual business hours.  Such list shall be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any member during the whole time of the meeting for the purpose thereof.  The original certificate transfer books shall be the prima fascia evidence as to who are the members entitled to examine the list or certificate books or to vote at any meeting of members.

Section 8: Nomination of Directors-  Any member who desires to seek election to a position on the Board of Directors shall cause a petition to be submitted to the company office(s), bearing the signatures of no less than ten (10) members within said District available for candidacy, which petition must be submitted no earlier than one hundred twenty (120) days nor fewer than seventy-five (75) days prior to the annual meeting of the members.  Montezuma Water Company shall furnish the official petition forms for this purpose. The official petition shall designate the name of the nominee, the term for which the nominee is being nominated and the director district for which the nomination is made. Upon verification of the petition by the Secretary/Treasurer the candidate’s name shall be place on the ballot for submission to the members for election. (Amended 8/13/02)

Section 9: Nominating/Election Committee- The Board of Directors shall appoint a nominating/election committee comprised of no less than three (3) members, one from each district up for election, and no more than seven (7) members from all districts. The members of the nominating/election committee shall not consist of members currently holding a director’s seat, candidate for director or an employee of Montezuma Water Company. In the event and only in the event that no candidate meets the petition requirements for any or all districts, the members of the Nominating/Election Committee shall seek a candidate for said district(s) and the candidate’s name shall be placed on the ballot for submission to the members for election. The Nominating/Election Committee shall verify and count ballot vote seven (7) days prior to the annual meeting of the membership. (Amended 9/11/01)  

Section 10: Ballot Issues-  Any member can request an issue to be place on the ballot for the membership to vote when a petition of valid members signatures of no less than fifteen (15%) of the total membership is presented. Such petition shall be submitted to the office no less than 120 days prior and no more than 240 days of the Annual Meeting. The majority of the Board of Directors may place an item on the ballot. (Adopted 6/8/04 )

ARTICLE IV

DIRECTORS

Section 1: Business-  The business and affairs of the corporation shall be managed by its Board of Directors.  The Board of Directors of the corporation shall consist of nine (9) directors.  A director of the corporation shall perform his duties as director, including his duties as a member of any committee of the Board upon which he may serve, in good faith, in manner he reasonably believes to be in the best interest of the corporation, and with such cause as an ordinary prudent person in a like position would use under similar circumstances.  A person who so performs his duty shall not have any liability by reason of being or having been a director of the corporation.

Section 2: Districts-  The first Board of Directors named on the Certificate of Incorporation shall serve until their successors area elected and qualified.  Prior to the first annual meeting of the members, the Board of Directors shall designate nine (9) districts within the area served by this corporation.  A map showing the District boundaries shall be posted in the principal office. Each District shall equal to each other and boundaries may be changed as circumstances dictate.  Each District shall be represented by one (1) director who shall reside within such district.

Section 3: Election and Term of Board of Directors-  At the first annual meeting of the members at which an election of directors is held, three (3) directors shall be elected, and three (3) directors shall be elected at each annual meeting of members thereafter.  The term shall consist of three years and shall not exceed three consecutive terms. (Amended 9/11/01)

Section 4: Meetings of Board of Directors-  Regular meetings of the Board of Directors shall be held monthly and there shall be an annual meeting of the Board of Directors immediately following the annual meeting of the members of this corporation.  No additional notice shall be required for the annual meeting of the Board of Directors other than notice given by these By-Laws.  A majority of the Board of Directors present in person at any meeting of the Board shall constitute a quorum.

Special meetings of the Board of Directors may be called by or at the request of the President or any three (3) directors.  The  person or persons authorized to call special meetings of the Board of Directors may fix a place, either within or without the State of Colorado, as the place for holding a special meeting of the Board of Directors called by them.

Written notice of any special meeting of directors shall be given as follows:

1.     By mail to each director at his business address at least three (3) days prior to the meeting; or

2.     By personal notificiation, either by telephone or in person, at least twenty-four (24) hours prior to the meeting to the business address of each director, or, in the event such notice is given on a Saturday, Sunday or holiday, to the resident address of each director.

If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, so addressed, with postage thereon prepaid.  Any director may waive notice of any meeting. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified on the notice or waiver of notice of such meeting.

Section 5: Election of Officers-  The Board of Directors shall elect at its annual meeting, by ballot, one of its members as President and one as Vice-President. The Board of Directors shall also elect a Secretary-Treasurer, who need not be a member of the Board of Directors of the corporation, or a member of the corporation.

Section 6: Term of Officers-  The said officers shall be elected for a period of one year, or until their successors are appointed and qualified.  See also Article V Section 4

Section 7: Compensation of Directors and Officers-  the Board of Directors and the officers, with the exception of the Secretary-Treasurer, shall serve without compensation: except that Directors will be paid $100.00 for each monthly meeting attended  for expenses incurred. (Amend 02/3/98) The Secretary-Treasurer may be paid a reasonable remuneration for services rendered as determined by the Board of Directors.  Directors may be compensated for mileage.

Section 8: Powers of the Board of Directors-  The Board of Directors shall have the general power to act for the corporation in any manner not prohibited by Statute or by the Certificate of Incorporation.  If the Corporation shall at any time borrow or receive by way of grant from the United States through any of its agencies, the Board of Directors shall pursue such management methods, including accounting and audits as such agency prescribe.

Section 9: Vacancies-  When any vacancies shall occur among the members of the Board of Directors by death, resignation, removal or because such vacating director has ceased to be a member of the corporation, such vacancy shall be filled by the remaining directors by the selection of a member of the corporation who shall serve as a member of the Board until the election of directors at the next annual meeting of members.

Section 10: Resignation-  Any director of the corporation may resign at anytime by giving written notice to the President or the Secretary of the corporation.  The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.  When one or more directors shall resign from the Board, effective at a future date, a majority of the directors then in office, including those who have resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.  The filling of such a vacancy should take place no later than fifteen (15) days.

Section 11: Removal-  Removal of any director or directors of this corporation may be removed in the manner provided in the Colorado Corporate Code.

Section 12: Presumption of Assent-  A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent or abstention to such action with the person acting as the Secretary  of the meeting before the adjournment thereof or shall forward such dissent or abstention by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting.  Such right to dissent shall not apply to a director who voted in favor of such action.

ARTICLE V

OFFICERS

Section 1: Duties of the President-  The President shall preside at all meetings of the members of this corporation and at all meetings of the Board of Directors.  He shall, together with the Secretary, execute Membership certificates, notes, bonds, mortgages, contracts, and all other instruments on behalf of the corporation.  He shall be ex-Officio, a member of all standing committees and shall have such powers and perform such other duties as may be properly required of him by the Board of Directors.

Section 2: Duties of the Vice-President-  The Vice-President shall, in the absence or disability of the President, or in the event of his death, resignation or removal from office, perform and discharge the duties and exercise the powers of the President.

Section 3: Duties of the Secretary-Treasurer-  The Secretary-Treasurer shall keep a record of the proceedings of the Board of Directors and shall keep a record of the proceedings of the Board of Directors and shall keep the books and records of the corporation and the seal of said corporation and shall attest the signatures of the official of the corporation executing documents on behalf of said corporation; shall collect assessments and moneys due the corporation and deposit the same in a depository designated by the Board of Directors, and shall disburse funds on the proper order of the Board, and shall make a report of the business transacted by him annually, and/or oftener if so requested by the Board of Directors or the President, and he shall do and perform such other duties and functions as may be required of him by the Board of Directors or the President.  The Secretary-Treasurer shall be covered in the performance of his duties by a surety bond in an amount to be determined by the Board of Directors.  The premium for such bond shall be paid by the corporation.  The Board of Directors may, at their discretion, appoint an Acting Secretary-Treasurer who shall have all of the powers and duties of the Secretary-Treasurer and shall act in the absence of the Secretary-Treasurer.

Section 4: Election and Term of Office-  The officers of the corporation to be elected by the Board of Directors shall be elected annually at the first meeting held after the annual meeting of the members.  If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as practical.  Each officer shall hold office until his successor shall have been duly elected and shall remain qualified until his death or until he shall resign or shall have been removed in the manner hereinafter provided.

Section 5: Removal-  Any officer may be removed by the Board of Directors, whenever in its judgment the best interest of the corporation will be served thereby.  Such removal shall be without prejudice to the contract rights, if any, of the person so removed.  A minimum of two-thirds (2/3) majority vote of the Board of directors is required for removal.  Election or appointment of an officer or agent shall not in and of itself create contract rights.

Section 6: Appointment and Duties of Manager-  The Board of Directors shall appoint, in addition to the officers above named,  a Company Manager.  The  Company Manager shall be in charge of the total day to day operations and affairs of the Company.  The Manager shall make to the Board of Directors a monthly report showing the condition of the system and the amount and character of work done during the previous month.  The Manager shall certify to the Secretary-Treasurer monthly the time spent by himself and each employee in performing work on behalf of the corporation,  The compensation to be paid for the performance of duties of the Manager, shall be in an amount determined by the Board of Directors.

ARTICLE VI

ASSESSMENT AND CHARGES

Section 1: Water Charge-  The Board of Directors shall establish a rate of charge for water flowing through the meters which are to be installed on each service line connected with the corporation’s system.  Such charges shall be in accordance with the amount registered by such meters.  The rate shall provide for a monthly minimum charge.  The Board of Directors shall be guided in establishing to pay the rate of water charges by the estimated amount necessary to pay the costs of operation, maintenance, repair, rehabilitation and construction for the system and payments of principal and interest of any indebtedness of the corporation which may have been contracted in connection with the corporation’s operation.  Water charges on water sold through meters shall become due monthly and shall become delinquent if not paid within ten (10) days from the date statement of the same is mailed by the Secretary and if not paid within thirty (30) days from the date said statement is mailed by the Secretary, the tap of said water user may there upon be shut off by the company or its authorized agents.  
Upon non-payment of an account by the due date a 2% penalty shall be assessed to the account.  The member shall receive a 2^nd notice of delinquency and possible shutoff date via mail.
Upon non-payment of an account of 60 days a 2% penalty on the balance shall be assessed and water service terminated. Delinquent account shall receive notice by mail of service termination.
Upon non-payment of an account of 90 days a 2% penalty on the balance shall be assessed and the member shall be notified via certified mail.
Upon non-payment of an account of 120 days a 2% penalty on the balance shall be assessed and the member shall be notified via certified mail.
Upon non-payment of an account of 150 days a $50.00 administrative shall be assessed, a 2% penalty on the balance shall be assessed, the account shall be presented to the Board of Directors and deemed abandoned and foreclosure proceedings shall begin.  The member shall be notified via certified mail of said action.
Upon repossession/foreclosure the company shall recuperate the balance owed on the account as well as all fees, may sell the membership and penalties associated with said delinquent account. Including fees incurred to sell the membership. Any residual monies after payment to the company shall be paid to the member.

Section 2: Membership Assessments-  If, for any reason, the total amount collected by the corporation from water charge in any year is, or in the judgment of the Board of Directors is estimated to be, insufficient to pay, when currently due, all costs and expenses in connection with the corporation’s operations and debt  retirement payments, then at the next annual meeting of the members, the Board of Directors shall recommend to the members the amount of membership assessments necessary to be levied to make up such deficit.  The assessment will not become effective unless approved by a majority of the members present in person or by proxy at the meeting.  However, should the members fail to make or authorize such assessments by the first (1^st) of January in any year, then the Board of Directors shall have the power to make the assessment at any regular or special meeting.  A proportionate amount of the total assessment shall be levied against each outstanding Membership Certificate in an amount equal to that portion which one Membership Certificate bears to the total outstanding Membership Certificates.

In the event the revenue of the corporation is insufficient at any time to pay current costs of operation and maintenance and debt retirement payments are resulting in a deficit so as to jeopardize debt retirement payments, or in case of financial  emergency requiring the levying of a special assessment, it shall be the duty of the Board of Directors to call a special meeting of the members to consider the question of levying such special assessments as may be required to make up the deficit or to meet the emergency, and in the event there are insufficient members present to constitute a quorum, or members fail to levy an adequate assessment to take care of such deficit or emergency, then it shall be the duty of the Board of Directors to proceed to make such levy and collect the same for the purposes required.

Section 3: Enforcement of Water Charge and Assessments-  The Board of Directors is authorized and directed to refuse to deliver water to any member who is delinquent in the payment of any monthly water charge or any assessment levied as provided in this Article, after fifteen (15) days of notice of such delinquency by mail properly addressed to the post office address of such member.  See also Section 1 of this Article

In the event of payment of water charges or assessments after service of water has been discontinued, the resumption of services may be made only upon the additional payment of such charge of penalty as the Board of Directors may have determined in the provisions made for the management of the affairs of the corporation.  Assessments shall become delinquent thirty (30) days after the vote of approval thereof by the members, or in the event of an assessment levied by the Board of Directors as provided in Section 2 of this Article, sixty (60) days after notice is given by the Board of Directors to members of such assessment.   After water service has been discontinued for ninety (90) days as a result of non-payment of charges or assessments, whether the water tap had or had not been installed, the membership so represented in the corporation may be deemed abandoned and all rights and privileges incidental thereto forfeited and terminated by action of the Board of Directors.

Section 4: Notification-  Notification shall be either by personal service or by registered or certified mail, return receipt requested, postage prepaid, at the members last known address as shown by the records of the corporation.  Proof of such mailing shall be sufficient notice under this Section.  It shall be the members responsibility to notify the company of any changes in their mailing address.

Section 5: Restriction on Use-  In the event of scarcity of water or failure or partial failure of supply for any reason, the Board of Directors shall have the power to restrict and limit the use of water from said system to domestic household purposes only.  Notice of the imposition to such restriction may be by phone, local news agencies, or by written notice delivered or mailed by the Secretary and shall be effective until the members are notified otherwise.

ARTICLE VII

MEMBERSHIP CERTIFICATES

Section 1: Form-  Each member of this corporation shall be issued a certificate denoting such membership in such form as may be prescribed by the Board of Directors.

Section 2: Membership Book-  As a part of the records of the corporation, there shall be kept a Membership Book  which shall contain a list of the Certificates of Membership which have been issued, noting the Certificates and date thereof and the name of the person to whom issued.

Section 3: Transfer of Membership-  Certificates of Membership may be transferred, and the transfer shall be noted on the books of the corporation, to such transferee upon the surrender of the Certificate properly endorsed.  No transfer of membership shall be valid until all of the indebtedness owed to the corporation is paid or adjusted to the satisfaction of the Board of Directors.  No transfer of membership shall be valid when made to a transferee who is not eligible for membership, as provided in Article II of these By-Laws.

Section 4: Membership Rights-  Each Membership Certificate shall entitle the holder thereof to one service connection with the water system of the corporation and each such service connection shall be entitled to a proportionate amount of water available through the system for any reason that the service connection bears to the total number of service connections with the system.  The rights, interests, obligations and duties represented by each membership certificate shall be equal except for commercial and industrial water tap memberships.

ARTICLE VIII

FISCAL YEAR

The fiscal year of said corporation shall be a period of one (1) year beginning January 1 and ending December 31 of the same year.

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