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By-Laws

The purpose for which this corporation is formed, and the powers which it may exercise are set forth in the articles of incorporation of the corporation.

Section 1

The name of this corporation is the Cheniere-Drew Water System, Inc

Section 2

The principal office of this corporation shall be located in the city of West Monroe, Parish of Ouachita, State of Louisiana.

Section 1

The seal of the corporation shall have inscribed thereon the name if the corporation, the year of its organization and the words “Corporation Not for Profit, State of Louisiana.”

Section 2

The secretary of the corporation shall have custody of the seal.

Section 1

The fiscal year of the corporation shall begin the 1st day of October in each year.

Section 1

Only property owners shall be entitled to membership. Persons owning property at more than one location within the system will be entitled to only one membership, with one vote, and will be charged only one membership fee. Property owned by more than one person or by a legal entity other than a person will be entitled to one membership, with one vote, to be exercised by the person who signs the membership certificate or water users agreement. If the person who signs the membership certificate or water users agreement is already a member, or owns a majority interest in the property, that property will be considered as being owned by the existing member, and an additional membership will not be issued. Membership shall not be denied because of the applicant’s race, color, creed, sex, age, marital status, or national origin. Membership may be denied if capacity of the corporation’s water system is exhausted by the need of its existing members, or if the proposed use of the applicant is such that it would interfere with existing uses previously authorized by the board of directors.

Section 2

Membership may be transferred without charge if the transferring member is moving out of the system. If not, the new owner of the property must purchase a membership, but the seller will not be required to purchase an additional membership upon relocation within the system.

Section 3

When membership in the corporation is not transferred, it shall terminate upon the disposition or other termination of the member’s interest in the property, regardless of whether or not the certificate is surrendered to the corporation. Membership also may be terminated by action of the board of directors where the use of the property is changed so as to materially increase the amount of water consumed to the prejudice of other existing members or to the prejudice of the orderly operation of the system.

Section 4

Termination of membership will not result in forfeiture of the former member’s rights and interest in the organization’s assets and the former member will not be precluded from receiving a proportionate share of any subsequent distribution of such assets by the organization as stated in Article 12 Section 3 herein.

Section 5

The termination of the membership of any member shall not disqualify for membership any other person who has or obtains an interest in the property of the terminated member and who otherwise meets the requirements of these by-laws.

Section 6

In the event a member’s property interest is divested other than by voluntary means, such member’s membership will pass to the trustee, executor, or the like who will be entitled either in person or through a designated representative to exercise all of the rights incident to such membership, but subject to such duties and liabilities also applicable to the membership. The trustee, receiver, executor, or the like, may terminate such membership by writtennotice to such effect delivered or mailed to the secretary of the corporation. Upon the final disposition of such property rights, the owner thereof shall be entitled to membership in like manner as if the membership had been transferred to the new property owner by the original member as set forth in Section 4 above.

Section 7

Upon the transfer of membership, the corporation will not look to the successor in interest for the payment of any past due amounts. The corporation will seek collection only from the individual who incurred such charges or assessments or from the property itself if a judgement lien had been duly perfected against such property.

Section 1

This corporation shall not have capital stock. Membership in the corporation shall be represented by membership certificates or water user agreements, which shall be signed by the members at the time of purchase, and shall be maintained in the corporate records. Members desiring a copy of the membership certificate or water user agreement shall be issued such at that time. Such certificates and/or agreements shall represent the right to use and enjoy the benefits of the corporation’s water supply system upon the payment of necessary assessments, if any, and of reasonable charges based upon such use, provided such use and enjoyment are consistent with the rules, regulations, and contracts affecting the same as may be from time to time prescribed by the board of directors.

Section 2

The membership certificate or water users agreement which shall be registered in the corporation’s records in the name of each eligible owner is in a form established by the board of directors. The form may be changed, from time to time, at the discretion of the board of directors.

Section 1

The annual meeting of the members of the corporation shall be held at any place, within Ouachita Parish, west of the Ouachita River, as provided in the articles of incorporation (Art. XII, § A), the by-laws, specified in the notice of the meeting and selected and stated in the call of such meeting. All meeting shall be called and held in accordance with the provisions of Article XII of the articles of incorporation.

A. The annual meeting of members of the corporation shall be on the second Tuesday in January of each year if not a legal holiday, or if a legal holiday, on the next business day following.

B. Special meetings of the members may be called at any time by the president of the board of directors or any person so authorized in the articles or by-laws. At any time, upon written request of any person entitled to call a special meeting, the secretary shall call a special meeting of the members to be held at the time, which the secretary fixes, not less than ten or more than sixty days after receipt of request. If the secretary neglects or refuses to issue the call, the person making the request may do so at the expiration of the 60 days. (See Arts. of Inc. art. XII, § B.)

C. At any meeting of members, a list of members entitled to vote, arranged alphabetically and certified by the secretary, showing each member, on the record date of the meeting shall be produced on the request of any member. This list shall be prima facie evidence of its contents, and of the right of the members listed therein to vote.

D. In the case of jointly owned or community property, either spouse or co-owner will be allowed to cast the membership unit’s single vote.

Section 2

Special meetings of the members shall be called in accordance with Article XII B of the articles of incorporation.

Section 3

Notices of the meetings shall be in accordance with the provisions of Article XII of the articles of incorporation.

A. Unless otherwise provided in the articles of by-laws, the authorized person or persons calling a members meeting shall cause written notice of the time, place and purpose of the meeting to be given to all members entitled to vote at such meeting, at least ten days and not more than sixty days prior to the day fixed for the meeting. If such written notice is placed in the United States mail, postage prepaid, and addressed to a member at his last known address, notice shall be deemed to have been given him. Notice of annual meeting need not state the purpose thereof, except as otherwise provided herein. Special meetings of the members shall be called in accordance with Article XII B of the articles of incorporation, and Article VII section 3, as amended.

B. If a quorum of the membership is present, adjournments of any annual or special meeting of members may be taken without new notice being given, unless a new record date is fixed for the adjourned meeting, but any meeting at which directors are to be elected shall be adjourned only from day to day until such directors have been elected.

Section 4

Quorums shall be determined in accordance with Article XII C of the articles of the incorporation. Quorums shall be required to conduct any business at the annual or special called meeting of members.

A. The presence in person or by proxy of a majority of voting members shall constitute a quorum.

B. The voting members present at a duly organized meeting (quorum present, and proof of notice given) shall constitute a quorum, and may continue to do business until adjournment, notwithstanding the withdrawal of enough members to leave less than a quorum as fixed in this section or in the articles of incorporation, these by-laws, or the refusal of any member present to vote.

C. If a meeting cannot be organized for lack of a quorum, those present may, except as otherwise provided in Louisiana law, adjourn the meeting to the time and place, which they determine. Notice of the second meeting shall again be attempted pursuant to Section 3 herein. However, in the case of a meeting called for the election of directors those who attend the second such adjourned meeting, although less than a quorum as fixed in this section, or in the articles of incorporation or by -laws, shall nevertheless constitute a quorum for the purpose of electing directors. In the case of the second such meeting called after a lack of a quorum for a purpose other than or in addition to the election of directors, including any item listed in the agenda of the first meeting which lacked a quorum which may include but shall not be limited to the amendment of the articles of incorporation or dissolution of the corporation, any number of members present shall constitute a quorum, as fixed in this section, notwithstanding any other provision of the law to the contrary.

D. A member shall have the right to cast his vote either in person or, by proxy, duly authorized in writing, signed by the member, and filed with the secretary at or before the meeting.

E. The proxy shall be revocable at will, unless otherwise validly provided by agreement or by any provision of the proxy. The validity of every proxy which has not been previously revoked shall cease eleven months after the date of its execution, unless some other definite period of validity shall expressly be provided therein; but in no case shall an outstanding proxy be valid for longer than three years. The revocation of a proxy (if revocable) shall not be effective until written notice thereof has been given to the secretary of the corporation, or unless a proxy of later date is filed with the secretary at or before the meeting.

F. A proxy regular on its face, and signed in the name of the member entitled to vote at the meeting, shall be deemed valid unless challenged before it is voted. The burden of proving invalidity shall be on the challenger. The Secretary of the corporation has discretionary authority to validate or invalidate a proxy once the proxy is challenged, but has no authority to accept outside (extrinsic) matters as evidence of validity or invalidity. The membership list shall be prima facie evidence of the right to vote of the members granting a proxy which is regular on its face…

G. Except as otherwise provided in the articles or by-laws, or in other provisions of this section, a majority of votes actually cast shall decide any matter properly brought before a membership meeting organized for the transaction of business, except that directors shall be elected by plurality vote.

Section 5

Directors of this corporation shall be elected in accordance with Article VIII B of the articles of incorporation. Directors may not hold any additional paid or unpaid position of employment or contractual agreement with the corporation such as consultant, general manager, or CEO, which could have the potential of a conflict of interest. A conflict of interest shall be determined by a vote of the membership based on the recommendations of an outside consultant.

A. No part of Article VII Section 5 of the corporation by-laws may be changed or altered by the board of directors without a super majority vote 85% (six out of seven) of the board members voting for the change or alteration. Board members must be present in person at the meeting to vote.

Section 6

The order of business at the regular meeting and so far as possible at all other meetings shall be:
1. Calling to order and proof of quorum.
2. Proof of notice of meeting.
3. Reading and action on any unapproved minutes.
4. Reports of officers and committees.
5. Election of directors (if appropriate).
6. Unfinished business.
7. New business.
8. Adjournment.

Section 7

Corporate records and reports shall be maintained and available to members.
A. The corporation shall keep at its registered office: (1) Records of the meeting of its membership, directors, committees of the board, and membership records, listing names and addresses of members in alphabetical order, records of its assets, liabilities, receipts, disbursements, gains, losses, capital, and surplus; and (2) separate records of all trust or loan funds held by it.

B. The records listed in section 7 paragraph A of this section may be in written form or any other form capable of being converted into written form within a reasonable period of time.

C. Every member entitled to vote may examine in person, or by agent or attorney, at any reasonable time, the records of the corporation listed herein above. Members are permitted to examine the general ledger of the corporation, cash journal of receipts, cash journal of all disbursements, un-audited quarterly financial statements, audited financial statements, record books of all proceedings of members and directors and any committees of board of the corporation, and any state and federal tax returns filed by the corporation, under his right to examine records and accounts of the corporation; however these rights do not include the right to examine originals of every canceled check, deposit slip, or invoice of the corporation.

D. Monthly financial statements and board meeting minutes will be available to any corporation member, in person, or by mail, (provided a self addressed, stamped return envelope is included with the written request) at a per page cost of copying of .50 for the first page, and .30 per page for any page thereafter.

E. Monthly financial statements are to be complete in all respects reflecting at a minimum, per item cost and expense codes, account balances, month, and month to date income and expenses, and general ledger sheets.

Section 1

(As amended by the board of directors Jan. 8. 2001) The board of directors of this corporation shall consist of seven members, all of whom shall be members of the corporation. Terms of the directors shall be served according to Article VIII B of the articles of incorporation and the limits established herein. A member elected to serve as a director shall, within the first year of service on the board of directors, obtain board member certification from the Louisiana Department of Health and Hospitals. Should a director refuse or fail to obtain this certification by the next annual meeting after his of her election to the board of directors, that director’s position shall terminate without any board action. The remainder of the term of such director’s position shall be filled in accordance with subsection 3 of this article.

Section 2

The board of directors shall meet within ten (10) days after the annual election of directors and shall elect a president, vice-president, secretary and treasurer, who need not be a member of the board of directors, each of whom shall hold office until the next annual meeting and until the election and qualification of a successor unless sooner removed by death, resignation, or for cause.

A. Board members or employees of the corporation will not receive free water, or any other free service from the corporation. No free service of any type or kind is to be provided or received by any members or non members of the corporation.

Section 3

If the position of any director becomes vacant by reason of death, resignation, retirement, disqualification or otherwise except by removal from office, a majority of the remaining directors shall by majority choose a successor who shall hold office until the next regular meeting of the members of the corporation at which time the members shall elect a director for the un-expired term or terms. If the vacancy described herein also creates a vacancy in an office of the Board of Directors, that vacancy shall be filled by the Board of Directors, from among their number so constituted after the vacancy in the board has been filled.

Section 4

No board member can serve on the board of CDWS more than four consecutive years.

A. Once a board member is is removed from or surrenders his position on the board of directors for any reason, he can not be elected or appointed to serve on the board for a minimum of two (2) years from the fiscal year end of the year in which the board member was removed from or surrendered his position on the board, or the maximum four years of service has been completed.

B. No part of this section may be changed or altered by the board of directors without a super majority vote 85% or more (six out of seven) of the board members voting for the change or alteration. Board members must be present in person at the meeting to vote.

C. In a situation where this section or any subsection herein is changed or altered by the board of directors, the membership must be notified in writing, within fifteen working days of such change or alteration. A mailing to each member of record at the time of the change or alteration is required. Said notice is to plainly state the foregoing by-law, the proposed new by-law, along with the reason for the change or alteration. Enclosed with the notice of change must be a separate voting form for the member(s) to ratify or nullify the board’s action, together with a self-addressed return envelope with proper return postage affixed. Proof of notice must be made a part of the permanent records of the corporation for such notice(s) to the membership.

If the annual meeting of the membership is within thirty or less days, the requirement for the notice of the change in the by-laws shall be a separate notice from the meeting notice.

Section 5

A majority of the board of directors shall constitute a quorum at any meeting of the board. The affirmative vote of the majority of the directors at a meeting at which a quorum is present shall be the act of the board.

Section 6

Compensation of officers, if any, may be fixed only at any regular or special meeting of the board of directors, and must be reported to the membership at the annual meeting.

Section 7

Officers and directors may be removed from office in the following manner:
A. Any member, officer or director may present charges against a director or officer by filing them in writing with the secretary of the corporation. If presented by a member, a petition signed by ten percent of the members of the corporation must accompany the charges. If the officer (president or president elect in the president’s absence) fails to call the meeting, that shall constitute reason for removal of that officer without necessity of petition or notice. Once charges have been filed against a board member, that board member’s resignation shall not be valid or accepted until the next special or regular membership meeting. The board member’s vacancy shall be filled by a membership vote at the next regular or special meeting. The membership may accept the resignation of the board member or vote to remove the board member at that meeting or any adjournment thereof.

The vote to remove the board member shall be effective if approved by a vote of a majority of those voting if a quorum is present. If no quorum is present, a vote may be taken at a special meeting called for that purpose regardless of the lack of a quorum thereof. The director or officer against whom such charges have been presented shall be informed, in writing, of such charges at least twenty (20) days prior to the meeting, and shall have the opportunity at such meeting to be heard in person or by counsel and to present witnesses; and the person or persons presenting such charges shall have the same opportunity. If the removal of a director is approved, such action shall also vacate any other office held by the removed director in the corporation. A vacancy in the board thus created shall immediately be filled by a vote of a majority of the members present and voting at such meeting. The board of directors from among their number so constituted shall fill a vacancy in any office thus created after the vacancy in the board has been filled.

B. Any Board member or board officer, who misses two regularly or specially called board meetings, without notice either to the board president or board secretary, can by majority vote of the remaining board members, at any regular or special called board meeting, be removed from the board. Notice of the call for removal must be mailed by certified mail, return receipt requested, to the absent board member no less than seven days before the board meeting scheduled for the vote for removal of the board member or officer.

C. Board members who, without proper notice, miss the regular scheduled monthly board meeting, shall not receive their board member or officers compensation for the month. Proper notice is deemed to be given if the board member notifies the secretary, president, or any other board officer in person or in writing of his inability to attend the board meeting.

Section 1

The board of directors, subject to restrictions of law, the articles if incorporation, and these by-laws, shall exercise all of the powers of the corporation, and, without prejudice to or limitation upon their general powers, it is hereby, expressly provided that the board of directors shall have, and are hereby given full power and authority in respect to the matters as hereinafter set forth to be exercised by resolution duly adopted by the board.

A. To approve membership applications and to cause to be issued appropriate certificates and to permit the connection of properties to the system in the future in cases involving proposed construction may issue such certificates prior to the commencement of the proposed construction.

B. To select and appoint all agents or employees of the corporation, remove such agents or employees of the corporation, prescribe such duties and designate such powers as may not be inconsistent with these by-laws, fix there compensation and pay for faithful services.

C. To borrow from any source, money, goods, or services and to make and issue notes and other negotiable or nonnegotiable instruments evidencing indebtedness of the corporation; to make and issue mortgages, deeds of truest, pledges of revenue, trust agreements, security agreements and financing statements and other instruments evidencing a security interest in the assets of the corporation; and, to every act and thing necessary to effectuate the same.

D. To prescribe, adopt and amend, from time to time such equitable uniform rules and regulations as, in its discretion, may be deemed essential or convenient for the conduct of the business and affairs of the corporation and the guidance and control of its officers and employees, and to prescribe adequate penalties for the breach thereof.

E. To order, at least once each year, an audit of the books and accounts of the corporation by a competent public auditor or accountant. The report prepared by such auditor or accountant shall be submitted to the members of the corporation at their annual meeting, together with a proposed budget for the ensuing year. Copies of such audits and budgets shall be submitted to such parties as may be required by other agreements.

F. To fix and alter the charges to be paid by each member for services rendered by the corporation to the member, including connection or reconnection fees where such are deemed to be necessary by the directors, and to fix and alter the method of billing, time of payment, manner of connection, and penalties for late or nonpayment of the same. The board may establish one or more classes of users. All charges shall be uniform and non-discriminating within each class of users.

G. To require all officers, agents, and employees charged with responsibility for the custody of any of the funds of the corporation to give adequate bonds, the cost thereof to be paid by the corporation, and it shall be mandatory upon the directors to so require.

H. To select one or more banks to act as depositories of the funds of the corporation and to determine the manner of receiving, depositing, and disbursing the funds of the corporation and the form of checks and the person of persons by whom the same shall be signed, with the power to change such banks and the person of persons signing such checks and the form thereof at will.

I. To levy assessments against the members of the corporation in such manner and upon such proportionate basis as the directors deem equitable, and to enforce collection of such assessments by the suspension of water service or other legal methods.

J. To propose changes in management of the corporation from contract-based to self-operation (and vice-versa) is subject to approval by an affirmative, majority vote of the membership at a regularly called meeting of the membership, after a full and complete proposal for such change has been provided to the membership.

Section 1

Duties of President. The president shall preside over all meetings of the corporation and the board of directors, call special meetings of the board of directors, perform all acts and duties usually performed by an executive and presiding officer, and sign all membership certificates and such other papers of the corporation as may be authorized or directed to sign by the board of directors, provided the board of directors may authorize any person to sign any or all checks, contracts, and other instruments in writing on behalf of the corporation. The president shall call special meetings when presented with a proper request under Article 9 Section 6, or otherwise directed herein. The President shall perform such other duties as may be prescribed by the board of directors, which duties shall specifically include those contained in Article XIII D. 1. A. Of the articles of incorporation.

Section 2

Duties of the Vice-President. In the absence or disability of the President, the vice-president shall perform the duties of the President; provided, however, that in case of death, resignation, or disability of the President, the board of directors may declare the office vacant and elect a successor. The vice-president shall perform such other duties as may be prescribed by the board of directors, which duties shall specifically include those contained in Article VIII D. 1.B. of the articles of incorporation.

Section 3

Duties of the Secretary. The Secretary shall keep complete records of all meetings of the corporation and of the board of directors. (The Secretary shall keep complete minutes and records of all meetings of the corporation, board of directors, and of any committees or subcommittees. The Secretary shall maintain the corporation’s charter in good standing with the Secretary of State’s Office, state of Louisiana. The secretary shall attest to the President’s signature on any papers pertaining to the corporation, as required, unless otherwise directed by the board of directors. The Secretary shall serve, mail or deliver all notices required by law and by these by-laws. The Secretary shall keep the corporate seal, if any, and membership certificates issued. The Secretary shall keep proper membership certificate records, showing the name of each member of the corporation and date of issuance, surrender, transfer, termination, cancellation or forfeiture. The Secretary shall report requests for special meetings from the membership to the president or president elect in the president’s absence. The Secretary shall make all reports required or that office by law and shall perform such other duties as may be prescribed by the corporation or the board of directors, which duties shall specifically include those contained in Article VIII D. 1. C. of the articles of incorporation.

Section 4

Duties of the Treasurer. The Treasurer shall have general charge and supervision of the books and records of the corporation. The Treasurer shall make all reports required by law of that office and shall perform such other duties as may be required by the corporation or by the board of directors. Upon the election of a successor, the Treasurer shall turn over to the successor all books and other property belonging to the corporation that the Treasurer may possess. The Treasurer may also perform such duties with respect to the finances of the corporation as may be prescribed by the board of directors, which duties shall specifically include those contained in Article XIII D. 1. D. of the articles of incorporation.

Section 1

The corporation will maintain and operate a main distribution pipeline of lines from the source of the water supply and service lines from the main distribution pipeline or lines to the property line of each member of the corporation, at which points, designated as delivery points, meters to be purchased, installed, owned, and maintained by the corporation shall be placed. The corporation will consider the addition of newly developed areas to the system upon the written request of the developer in accordance with established policies and procedures of the corporation, and voted on by a majority membership of the board of directors. If accepted, the developer shall be responsible for the installation of all lines within the development, and shall transfer ownership of the same to the corporation. Under no circumstances will the board of directors obligate the corporation for any expenditures for distribution lines or other lines, connections, tees, valves, fire hydrants, or other related equipment within such a development. The corporation shall maintain and operate the lines upon transfer, to the meters of the individual lot owners within the development. If existing lines do not extend to the property line of the developer, the developer shall be responsible for all cost in extending the line from the existing connect point to the property line, including the purchase of necessary rights of way. The corporation shall also consider applications for service to be extended to individual owners, with the responsibilities of the applicant being the same as those of a developer as set forth above. The corporation shall maintain the right to decline acceptance of any application for extension of service, if, in the judgment and discretion of the board of directors, the system cannot adequately furnish such without adverse effects to the system, or if it, would be uneconomical. The construction of such extension by the applicant, if the application is accepted, must comply with specifications prescribed by the board of directors.

Section 2

The corporation shall be responsible for up-grading or replacing existing lines to the property lines of its members, as part of its maintenance and operation procedures.

Section 3

Each member will be required, at the member’s expense, to install and, maintain the portion of any service line from the meter to the point of use.

Section 4

Each member may be permitted to purchase form the corporation, pursuant to such agreement as may from time to time be provided and required by the corporation, such water as is needed for domestic, commercial, agricultural, industrial and other purposes as a member may desire, subject, however, to the provisions of these by-laws and to such rules and regulations as may be prescribed by the board of directors.
Each member shall be entitled to have delivered, through the member’s service lines, only such water as may be necessary to supply the needs of each member, including the member’s family, business, agricultural, or industrial requirements. Each dwelling must be metered separately.

Section 5

In the event the total water supply shall be insufficient to meet all of the needs of the members or in the event there is a shortage of water, the corporation may prorate the water available among the various members on such basis as is deemed equitable by the board of directors, and may also prescribe a schedule of hours covering use of water for commercial, agricultural or industrial purposes by particular members and require adherence thereto or prohibit the use of water for commercial, agricultural or industrial purposes; provided that, if at any time the total water supply shall be insufficient to meet all of the needs of all of the members for domestic, livestock, commercial, agricultural or industrial purposes, the corporation must first satisfy all of the reasonable needs of the members for domestic purposes before supplying any water for livestock purposes and must satisfy all of the needs of all of the members for domestic and livestock purposes before supplying any water for commercial or industrial purposes; and provided further, that where a member has more than one service line, the corporation may cut off the flow of water to the non-domestic service lines until such time as the supply of water form the system is sufficient to meet the needs of all the members for domestic and livestock purposes. During such periods of shutoff of additional service lines there shall be no minimum fee charged to the members having such additional service lines and the cost, if any, of resuming the flow of water to such additional service lines shall be born by the corporation.

Section 6

The board of directors shall, with the consent of the Farmers Home Administration, so long as it shall either hold any obligation to insure any financing of the system, prior to the beginning of each calendar year, determine the flat minimum monthly rate to be charged each member during the following calendar year for a specified quantity of water, such flat minimum monthly rate to b e payable irrespective of whether any water is used by a member during any month, the amount of additional charges, if any, for additional water which may be supplied the members, and the amount of penalty for late payments, and shall fix the date for the payment of such charges. A member to be entitled to the delivery of water shall pay such charges at the office designated by the corporation at or prior to the dates fixed by the board of directors. The failure to pay water charges duly imposed within the (10) days of the due date will result in a penalty of 10% of the amount of the bill, and failure to pay by the twentieth (20th) day of the month following the month in which the bill is due shall result in the water being shut off from the members property without any notice thereof of such delinquent member. Upon the payment by the delinquent member of the past due water charges, penalties thereon and any re-connection charge, such member shall be entitled to resumption of the water supply. During the time of suspension of water to a member, such member shall have no right to vote in the affairs of the corporation.

Section 7

The board of directors shall be authorized to require each member to enter into a water users agreement which shall embody the principals set forth in the foregoing provisions of these by-laws.

Section 1

It is not anticipated that there will be any surplus funds of net income to the corporation at the end if the fiscal year after provisions are made for the payment of the expenses of operation and maintenance and the funding of the various reserves for depreciation, debt retirement, and other purposes, including those required by the terms of any borrowing transaction. The occurrence in subsequent fiscal years of surplus funds or net income above the requirements of the corporation as above mentioned including, if any, a reserve for improvements and extension of the facilities shall be taken into consideration by the board of directors in determining the water rates to be charged the members.

Section 2

The organization will provide services substantially at cost. Dividends shall not be paid on the basis of membership shares of stock in the organization. All funds from whatever sources remaining at the end of the year in excess of those needed to meet current losses and expenses will be retained for such purpose as retiring indebtedness incurred in acquiring assets, expanding the organization’s service, maintaining water rates. Required records for this purpose include financial records that show the organization’s revenues from all sources for the fiscal year ending and a current list of all members.

Section 3

Upon dissolution, after paying off all debts and obligations, members will be entitled to receive their equitable share of all proceeds remaining to the extent practicable as reflected by the records, in accordance with Article XIII A of the Articles of incorporation. Membership must be in good standing to receive this distribution. No proceeds remaining from dissolution will be distributed to any member who has an outstanding balance due the corporation. Water service obligations due from the member on the final day of service from the corporation will be deducted from any amounts due the member before any distribution of dissolution funds due the members.
Only members of record as reflected on the books of the corporation as of January 1st in the year of the dissolution will be eligible for any surplus dissolution funds as described in herein above.

Section 1

These by-laws may be repealed or amended as set forth in Article XIII of the articles of incorporation, and as provided herein.