FRUITLAND DOMESTIC WATER COMPANY

FRUITLAND DOMESTIC WATER COMPANY Crawford, Colorado Delta and Montrose Counties Bylaws 2015 Edition

ARTICLE I Name, Objects, Purposes, Principal Place of Business, And Non-discrimination Statement Section 1: The corporate name, the objects and purposes and the principal place of business of this company shall be as stated in and provided by the Articles of Incorporation of the company heretofore filed in the office of the Secretary of State of Colorado and the office of the County Clerk and Recorder of Delta County, Colorado, as required by the laws of the State of Colorado. Section 2: Non-Discrimination Statement (a) The Fruitland Domestic Water Company (FDWC) is committed to the principle of equal opportunity in education and employment. FDWC does not and shall not discriminate against individuals on the basis of race, color, national or ethnic origin or ancestry, citizenship, religion, sex, gender identity, sexual orientation, pregnancy (including childbirth, and medical conditions related to pregnancy or childbirth), physical or mental disability, medical condition (cancer-related or genetic characteristics), marital or familial status, age, or status as a covered veteran (covered veterans are special disabled veterans, recently separated veterans, Vietnam era veterans, or any other veterans who served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized) in any of its programs or activities. (b) The FDWC's policy is intended to be consistent with the provisions of Title IX of the Education Amendments of 1972, as amended, Section 504 of the Vocational Rehabilitation Act of 1973, as amended, Titles VI and VII of the Civil Rights Act of 1973, 2

as amended, the Age Discrimination Act of 1975, as amended, other equal opportunity and affirmative action regulations and laws, and other relevant federal, state and local laws. ARTICLE II Seal The seal of this company shall have inscribed thereon the name of the company and the words "Seal" and "Colorado". ARTICLE III Membership Section 1. Persons owning Fruitland Irrigation Company domestic stock shall be entitled to subscribe for and receive membership shares of this company in exchange for their shares of said domestic stock. No stock in this corporation shall be issued until all of said domestic stock has been tendered to this corporation pursuant to such subscriptions and not later than ninety (90) days following receipt of all of said domestic stock, the corporation shall issue the shares of this corporation to said subscribers in numbers equal to their shares of said domestic stock. Section 2. Each 400 shares in this Association shall entitle the holder to one service connection with the company's system. Each 400 shares shall entitle the holder to a pro rata share of the water in the system, being a dole of one quart per minute or 10,000 gallons per month if metered. (a) Those original stockholders of the Fruitland Irrigation Company as of January 1, 1978, were entitled to one meter instead of a dole "tap" upon application to this corporation and by paying the actual cost difference of the meter installation. Those "meter" rights were transferable by a member at any time during his membership in the company 3

upon notice in writing to the company subject to the company being able to deliver this water at the new point on the system desired by the transferee. Because of the impact of a metered connection on the greatly expanded FDWC system, effective January 1, 2016, no metered connections may be sold and relocated; metered connections may be transferred with the property they serve, but they must remain at that location. (b) All new installation or service connections shall be charged the actual cost of the installation together with a pro rata share of all system acquisition costs paid by the company and its predecessor, Fruitland Irrigation Company, to the date of installation. (c) All requests for new service connections shall be subject to the ability of the company to deliver adequate water at the point desired as determined by the board of directors. Section 3. (a) There shall be two classes of membership shares in this association. Those membership shares that are receiving water or that have been previously assessed as Fruitland Irrigation Company domestic shares. These shares shall be subject to all assessments and known as "ACTIVE" shares. These ACTIVE shares shall be so stated on the books of the company. (b) Those membership shares not receiving water or which have not been previously assessed as Fruitland Irrigation Company shares. These shares shall be known as "INACTIVE" shares. (c) INACTIVE shares may be transferred to ACTIVE status by the owner(s) of record so indicating to the secretary of the company in writing OR by requesting water service. 4

(d) Once shares are transferred to ACTIVE status, they may not be transferred to INACTIVE status. Section 4. Total membership shares in this association shall be limited to 200,000. Section 5. Whereas this corporation is organized for the purpose of acquiring the Fruitland Irrigation Company Domestic Water System, those stockholders or stock shares originally allocated "partial taps" under that system shall be retained in this status by this company. Section 6. All new service connections shall require at least 400 shares of ACTIVE status. All dole taps shall be in multiples of 400. Water may be changed from one service connection to another; however, if it shall appear that such changing shall impair the equilibrium of the flow of water in the system, then the board of directors shall make an equitable regulation of the matter. Persons desiring the changes shall pay the costs therefor as determined by the board. Section 7. Members' rights and interests in any assets or retained earnings will not be forfeited upon withdrawal or termination of membership. Any funds, in excess of those needed to meet current losses and expenses, that are returned to members will be distributed in proportion to the amount of business they have done with the Company. Any additional assessments will be in proportion to the amount of business members have done with the Company. Any gains from the sale of assets upon dissolution will be returned to members and former members who were members during the time the assets were owned, to the extent practicable, in proportion to the amount of business they have done with the Company. 5

Section 8. Company Owned Water Shares. No Company owned FDWC shares shall be sold. Company owned FDWC shares may be leased to FDWC shareholders in 400 share increments on a month-to-month basis. This lease may be terminated at any time by either party with ten days written notice to the other party s mailing address. Company owned shares in any other water company shall not be sold or leased unless they are exchanged for FDWC shares representing an equal amount of water. The requirements and constraints of Section 5-g of the Company s Operating Rules shall apply to rentals under this Article. ARTICLE IV 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 said meeting shall be held in the Town of Crawford, County of Delta, State of Colorado, during the first calendar quarter (January 1 through March 31) of each year. Public notice of the time and place of said meeting shall be given by the secretary by publication in one or more newspapers or shoppers published in Delta County, Colorado, such notice to be published at least once not more than thirty (30) days, or less than ten (10) days, prior to the date fixed for said meeting, and by giving no more than thirty (30) days, or less than ten (10) days written notice of said meeting by depositing a copy of said notice in the post office addressed to each member at his place of residence as the same appears on the records of the company, or by delivering such notice personally to each member. Section 2. Special Meetings. Special meetings of the members may be called at any time by the president, or by a majority of the directors. The president, or in his absence, the vice president, shall call a special meeting upon the written petition of one-third of the 6

membership shares of the 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 (15) actual owners of record, in person, together representing ten percent (10%) of the total membership shares of this company, present either in person or by proxy, shall constitute a quorum for the transaction of business at any annual or special membership meeting. If such a quorum is not present, the meeting may be adjourned from time to time by a majority of those present, provided that such meeting may not be adjourned for a period to exceed sixty (60) days for any one adjournment. Section 4. Order of Business. All membership meetings of the company shall be governed by Robert's Rules of Order. The order of business at all membership meetings shall include as far as possible: 1. Roll call. 2. Proof of due notice and determination of quorum. 3. Reading and disposal of any unapproved minutes. 4. Nominations for vacancies on the board of directors. 5. Report of board of directors by president or vice president. 6. Report of secretary. 7. Report of treasurer. 8. Unfinished business. 9. New business. 10. Election. 11. Adjournment. 7

Section 5. Voting Rights. Each person holding membership or memberships shall be entitled to one vote per membership share held. Voting by proxy will be permitted. Cumulative voting shall be prohibited. ARTICLE V Directors Section 1. Functions of the Board of Directors. The business and affairs of this company shall be managed by a board of seven (7) members. Its functions shall include: (a) the selection of and delegation of authority to management. (b) the determination of policies for guidance of management. (c) the control of expenditures by authorizing budgets. (d) keeping members fully informed of the business of the company. (e) causing audits to be made at least once each year, or oftener, and reports thereof to be made directly to the board. (f) studying the requirements of members and promoting good membership relations. (g) prescribing the form of membership certificates. (h) establishing water charges and levying and collecting assessments and enforcing the collection thereof in accordance with the laws of the State of Colorado. Section 2. Election and Term of Directors. Directors shall be elected by the members to staggered two-year terms and shall serve until their successors have been duly elected and qualified. All directors shall be eligible for re-election. Section 3. Election of Officers. The board of directors shall elect by ballot one of its members to be the president and one to be vice president, and shall also elect a secretary- 8

treasurer, who need not be a member of the board of directors of the company or a member of the company. Section 4. Term of Officers. Said officers shall be elected for a period of one year, or until their successors are appointed and qualified. Section 5. Compensation of Directors and Officers. The board of directors and the officers shall be entitled to receive reasonable remuneration set by the Board of Directors for services rendered. Section 6. Meetings of the Board of Directors (a) Regular Meetings. Immediately following the annual meeting of the shareholders, or as soon thereafter as possible, the newly elected Board of Directors shall have its annual meeting when it shall elect officers of the board and determine the day of the regular monthly Board meetings for the next year. This schedule will be subject to change, but the date, time, and location of the meeting will be made available to Company shareholders regularly. (b) Special Meetings. Special meetings of the Board of Directors may be held at any place within the State of Colorado at any time when called by the President, Vice- President, or two or more directors. Notice of the time, place, and purpose thereof shall be given to each director at least three days before the meeting if by mail or at least forty-eight hours if in person or by telephone. A waiver of such notice in writing, signed by the person or persons entitled to said notice, either before or after the time stated therein, shall be deemed equivalent to such notice. (c) Quorum. The presence, at any meeting, of four directors shall be necessary and sufficient to constitute a quorum for the transaction of business. Except as otherwise 9

required by statute or by the Certificate of Incorporation, the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the directors present at the time and place of any meeting may adjourn such meeting from time to time until a quorum is present. (d) Consent of Directors in Lieu of Meeting. (1) Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting, if prior to such action, each and every member of the Board in writing either: (i) Votes for such action; or (ii) (I) Votes against such action or abstains from voting; and (II) Waives the right to demand that action not be taken without a meeting. (2) Action may be taken under this section only if the affirmative vote for such action equals or exceeds the minimum number of votes that would be necessary to take such action at a meeting at which all of the directors then in office were present and voted. (3) No action taken without a meeting shall be effective unless writings describing the action taken and otherwise satisfying the above requirements, signed by all directors and not revoked, are received by the Board. Any such writing may be received by the Board by electronically transmitted facsimile or other form of wire or wireless communication providing the Board with a complete copy of the document, including a signature on the document. A director's right to demand that action not be taken without a meeting shall be deemed to have been waived if the Board receives a writing satisfying the above requirements that has been signed by the director and not revoked. Action taken 10

without a meeting shall be effective when the last writing necessary to effect the action is received by the Board unless a different effective date is so indicated, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 7. Powers of the Board. The board of directors shall have the general power to act for the company in any manner not prohibited by statute, or by the Articles of Incorporation. If the company shall at any time borrow or receive by any way of grant any property from the United States, through any of its agencies, the board of directors shall pursue such management methods, including accounting and audits, such agency may prescribe. Section 8. Removal of Directors (a) Directors elected by voting shareholders may be removed as follows: (1) The Board of Directors may, on its own motion or upon receipt of a written petition of 1/3 of the membership shares in the Company, call a special meeting of the membership, pursuant to Article IV, Section 2 of the Company s Bylaws, for the purpose of requesting a membership vote on the removal of one or more directors. (2) The voting shareholders may remove one or more directors elected by them with or without cause; (3) Voting members may only remove a director at the Annual Meeting or at a meeting called pursuant to Article IV, Section 2 of the Company s Bylaws, for the purpose of removing that director, and the meeting notice shall state that the purpose, or one of the purposes, of the meeting is the removal of the director; (4) Provided a quorum as defined in Article IV, Section 3, is present at the meeting, a director may be removed by a majority of votes cast by the membership at the meeting. 11

(b) A director who has failed to attend three consecutive meetings of the Board of Directors without reasonable explanation may be removed by a five member majority vote of the remaining directors, if and when, in their judgment, said removal will best serve the interests of the Company. (c) A director appointed pursuant to Article V, Section 9 of these Bylaws, may be removed, with or without cause, by a five member majority vote of the remaining directors. The director shall be removed by written notice from the Board of the removal to the director and to the Company and shall be effective on the date of the following Board meeting. (d) Notice will be deemed to have been received by the director being removed when it is sent by certified U.S. Mail to the director s last known address of record with the Company. Notice will be provided to the Company by printing an announcement of the removal on the next monthly invoice to shareholders. Section 9. Vacancies. When any vacancies shall occur among the members of the board of directors by death, resignation or because such vacating director has ceased to be a member of the company, such vacancy shall be filled by the remaining directors by the appointment of a member of the company who shall serve as a member of the board until the election of directors at the next ensuing annual meeting of members. If a director is appointed to fill a vacancy occurring during the first year of a regular two year term, his successor shall be elected at the next annual meeting of members to serve for the balance of said regular term only. Section 10. Indemnification of Corporate Directors and Officers. The directors, officers, employees and agents of the Corporation shall be entitled to indemnification from the 12

Corporation to the extent provided under C.R.S. 7-3-101.5 as the same may be amended from time to time, as fully as if the Corporation were a profit corporation rather than a nonprofit corporation. ARTICLE VI Officers Section 1. Duties of the President. The president shall preside at all meetings of the board of directors. He shall execute membership certificates, notes, bonds, mortgages, contracts and all other instruments on behalf of the company. He shall be ex officio a member of all standing committees and he 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 the books and records of the company and the seal of said company and shall attest the signatures of the officials of the company executing documents on behalf of said company; shall collect assessments and moneys due the company and deposit the same in the 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 not less frequently than annually, and at any other time 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 13

surety bond in an amount to be determined by the board of directors. The premium for such bond shall be paid by the company. Section 4. Appointment and Duties of Operator in Responsible Charge. The board of directors shall appoint, in addition to the officers above named, an operator in responsible charge of the domestic water system who will be in charge of the work of construction, maintenance, and repair of the system of the company and of the distribution of water. The operator in responsible charge shall be appropriately certified by the Colorado Department of Public Health and Environment. He 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. He shall certify to the secretary-treasurer monthly the time spent by himself and by each laborer in performing work in behalf of the company. The compensation to be paid for the performance of duties of the operator in responsible charge and any laborers or any assistants he may hire shall be in an amount to be determined by the board of directors. ARTICLE VII Assessments and Charges Section 1. Rates & Assessments. The board of directors shall establish a monthly rate for delivery of water to the service connections which are to be installed on each service line connected with the company system. A higher rate will be charged for each of the first two taps and a lower rate will be charged for the remaining taps owned by the same shareholder. The board of directors shall be guided in establishing the rate of water rates by the estimated amount necessary to pay the costs of operations, maintenance, repair, rehabilitation and construction of the system, other capital improvements, and payments of principal and 14

interest of any indebtedness of the company that may have been contracted in connection with the company's operation. The Board may also levy a special assessment when needed to cover capital improvement or other expenses. Section 2. Enforcement of Payment of Water Charges 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 water charge or any assessment levied as provided in Section 1 of this Article, after thirty (30) days notice of such delinquency by mail properly addressed to the post office address of such member, certified mail with return receipt requested. Delinquent assessments shall bear interest at the rate of 1.5% per month until paid. In addition, the board is authorized to sell the membership shares of any member who remains delinquent in the payment of water charges or assessments for a period of sixty (60) days after notice of such delinquency is given, as hereinabove provided. Any surplus in the proceeds of a sale of membership shares over the amount of the delinquency and proper legal and other expenses incurred by the Company shall be paid to the delinquent member. In the event of payment of water charges or assessments after service of water has been discontinued, the resumption of service may be made only upon the additional payment of such charge or penalty as the board of directors may have determined in the provisions made for the management of the affairs of the company. ARTICLE VIII Membership Certificates Section 1. Form. The membership certificates of this company shall be in the following form: 15

"This is to certify that is (are) the holder(s) of active membership shares and inactive membership shares of The Fruitland Domestic Water Company, a corporation without capital stock, organized under the laws of the State of Colorado, with its principal place of business at Crawford, Colorado, and that the person(s) named above is (are) entitled to all the benefits and subject to all rules and regulations of the Company, including liability for assessments, as provided in its Articles of Incorporation and Bylaws. The membership shares represented hereby are transferable, in whole or in part, only upon the books of the Company. "IN WITNESS WHEREOF, the FRUITLAND DOMESTIC WATER COMPANY has caused this Certificate to be signed by its duly authorized officers and sealed with its corporate seal this day of,. "ATTEST: Secretary President "SEAL" Section 2. Membership Book. As a part of the records of the company there shall be kept a membership book, which shall contain a list of the certificates of membership which have been issued, noting the number of certificate and the date thereof and the name of the person to whom issued. 16

Section 3. Transfer of Membership. Certificates of membership may be transferred and the transfer shall be noted on the books of the company to such transferee upon the surrender of the certificate properly endorsed. No transfer of membership shall be valid until all unpaid indebtedness owed to the company is paid or adjusted to the satisfaction of the board of directors. ARTICLE IX Amendments These Bylaws, or any section or article thereof, may be changed, amended or repealed at any regular member meeting, or any special meeting of the members held for that purpose, provided notice of such proposed changes has been incorporated in the call for such meeting. 17