Bylaws of
MCNULTY WATER ASSOCIATION

ARTICLE  I.  MEMBERSHIP
	Section 1. MEMBERSHIP QUALIFICATIONS
	a) Any owner or bona fide occupant of real  property in the area served with domestic water by this corporation, or to be served as such shall be determined by the board of directors, may be admitted to membership, provided his application has been approved by the board of directors, he has subscribed to sufficient capital of the corporation to bring his investment to a parity with that of other members, and has agreed to comply with the provisions of the articles of incorporation, the bylaws, and with such rules and regulations as shall be adopted by the board or the membership.
	New applicants joining the Association will pay meter costs and installation charges in addition to membership fees. Meters will become the property of the Association.

	b) Each family dwelling shall have separate memberships ( i.e. single family dwellings, single mobile homes, separate houses on same property).  Duplexes, multiple family dwellings, etc., shall have a separate meter for each family. Commercial establishments (i.e. motels, trailer courts, commercial outlets) shall have meters subject to board of directors approval.

	Section 2.  MEMBERSHIP FEE. Upon admission each member shall pay a membership fee of $25.00, which fee shall not be capitalized but shall be expended to cover in part the cost of entering the membership upon the books of the corporation.

	Section 3. MEMBERSHIP CERTIFICATE.  There shall be issued  to each member a numbered membership certificate which shall be recorded in the books of the corporation.  Each membership certificate shall bear on its face the following statements:

a. This membership certificate, No. __________ , is issued and accepted in accordance with and subject to the conditions and restriction stipulated in the articles of incorporation and By-Laws and amendments to the same of the McNulty Water Association.
 
b. Transfers of membership certificates shall be made only upon the books of the Association, only to persons eligible to become members, only with the approval of the board of directors and only when the member transferring is free from indebtedness to the Association.
 
c. No member of this Association shall be entitled to more than one vote at meetings of the members of the Association.  Every member upon becoming a member of this Association agrees to sign such agreement for the purchase of water from the Association as may from time to time be provided and required by the Association and agrees in case he desires to dispose of his membership certificate, to first offer the same to the Association at its fair book value and that he will make no offer of assignment or sale of the same unless the Association shall fail after 30 days notice in writing so to purchase the membership certificate.
                
Each member agrees to sign such water users agreements as the Association shall from time to time provide and require.

	Section 4. MEMBERSHIP TRANSFER  shall be made only pursuant to the provisions in Article III of the articles of incorporation.

	Section 5. MEMBERSHIP CANCELLATION.  In the event any member is delinquent as to any portion of the annual dues one year from the date the dues levy was made, as shown by the minutes of the board of directors, water service will be terminated although the member will retain equity interest.

	Section 6. MEMBER'S RIGHT TO SERVICE. Each member shall be entitled to water delivered to the water meter serving his outlet, but the Association shall retain ownership of the meters and make repairs or replacement. In the event of a shortage of water the board of directors shall have the power to restrict, on an equitable basis as among the members, the sprinkling or irrigation of lawns and gardens.

	Section 7. OWNERSHIP OF SYSTEM COMPONENTS. The main water lines shall be defined as the system starting with the source of the water supply and service lines from the main distribution pipe line or lines to the property line of each member of the Association. 

	The water line so described, any future extension thereof, and branches extending to and including the meter of the user shall be owned and maintained by this cooperative.  Lines extending from the meters shall be owned and maintained by the members as individuals.

	Section 8. EACH MEMBER GRANTS RIGHT OF ENTRY. Each member of this corporation grants to it the right of entry upon his property for the purpose of maintenance and repair of the main line, and for the purpose of terminating water service in the event his membership shall have been duly canceled.


		ARTICLE II.  FISCAL YEAR - MEETINGS

	Section 1.  FISCAL YEAR. The fiscal year of this corporation shall be the calendar year.

	Section 2.  ANNUAL MEETING.  The annual meeting of the members of this corporation shall be held on the 3rd Tuesday of January  of each year, or as the board may direct at such place, and hour as shall be determined by the board of directors.

	Section 3.  SPECIAL MEETINGS. Special meetings of the members may be called by the board of directors for any place, date and hour.  Such meetings shall be called whenever requested in the form of a written petition filed with the secretary and signed by ten percent of the members, which petition shall state the nature of the business to be brought before the corporation.

	Section 4.  MEETING NOTICES.  Notice of each membership meeting shall be mailed by the secretary to each member to the address shown on the books of the corporation not less than ten (10) or more than twenty (20) days prior thereto. Notice of any special meeting shall state the nature of the business to be transacted.

	Section 5. QUORUM. Those members present shall constitute a quorum for the transaction of business at any meeting of the members.

	Section 6.  VOTING  Each member in good standing shall have one and only one vote.  Voting by proxy or by mail shall not be permitted, except as required by law.  A partnership that is a member shall have only one vote , to be cast by the person designated by the partnership.  For voting purposes a husband and wife shall be deemed to be a partnership.  The vote of a member that is an incorporated group shall be cast by any person duly authorized by the member corporation.  The vote of a member that is an estate shall be cast by the legal representative thereof.  


Article III.  DIRECTORS - OFFICERS

Section 1. DIRECTORATE   Beginning with the election at the first annual meeting, the board of directors of this corporation shall consist of five (5) persons elected by ballot by and from the members.   At said first annual meeting two directors shall be elected to serve a term of three (3) years, two directors shall be elected to serve a term of   two (2) years, and one director shall be elected to serve a term of one (1) year.  At subsequent annual meetings, as terms expire, directors shall be elected each to serve a term of three (3) years.  Each director shall serve until his successor shall have been duly elected, qualified, and entered upon the discharge of his duties.
  
Section 2. BOARD ORGANIZATION   Within the ten (10) days after each annual election  the Board of directors shall meet and elect from their number by ballot a President, and a Vice-President and a Secretary-Treasurer who may or may not be a member of the board or of the corporation.  All officers shall hold office for one year or until their successors shall have been duly elected.

Section 3. BOARD VACANCIES   Any vacancy on the board of directors, other than by expiration of terms shall be filled by affirmative majority vote of the remaining members of the board, and any director so chosen shall hold office for the unexpired portion of the term of the director he shall have been elected to fill.

Section 4. BOARD MEETINGS   The board of directors shall meet on call of the President, at the principal office of the corporation or at such other place the board shall have determined.  Special meetings of the board shall be called when requested by written petition filed with the Secretary and signed by two(2) member of the board.  Effective notice of all board meetings shall be given by the Secretary, except that notice may be waived by attendance of all board members.

Section 5. QUORUM  Three (3) members of the board of directors shall constitute a quorum for the transaction of business at any duly called meeting.

Section 6. BOARD COMPENSATION    The corporation may provide, at any meeting of the members, a fair remuneration for the costs actually spent by its directors and officers in the performance of their duties.   No director, during his term of office, shall occupy any position in the corporation on regular salary, nor be a party to a contract for profit with the corporation different in any way from the business relations with other members.
Article IV. DUTIES OF DIRECTORS
Section 1. CONDUCT AFFAIRS  The board of directors shall establish the policies, generally conduct the affairs, and make the necessary rules and regulations, including provisions for an annual audit, not inconsistent with the law, the articles of incorporation or these by-laws, for the management of the business and for the guidance of the officers, employees and agents of the corporation.

Section 2. MANAGER. The board of directors may designate or employ a manager, or a caretaker, define his duties, fix his compensation if any, and may dismiss him for cause.

Section 3.  MEMBERSHIP MEETINGS  The board of directors shall call all meetings of the members.

Section 4. DEPOSITORY  The board of directors shall designate one or more depositories for corporation funds and, by appropriate resolution inscribed in the minute book, specify proper safeguards for the handling of such funds including the person or persons authorized to sign checks and vouchers.

Section 5. REGISTERED OFFICE AND REGISTERED AGENT  The board of directors shall cause to be kept on a current basis the records in the office of the State Corporation Commissioner as to the corporation's registered office and registered agent.
Section 6.  MEMBERSHIP DUES AND SERVICE CHARGES. The board of directors shall, prior to the beginning of each calendar year, determine the flat minimum rate to be charged each member during the following calendar year for a specified quantity of water, such flat minimum monthly rate to be payable irrespective of whether any water is used by a member during any month, and the amount of additional charges, if any, for additional water which may be supplied the members, shall fix the date for the payment of such charges, and shall notify each member of the amount of such charges and the dates for the payment thereof. A member to be entitled to the delivery of water shall pay such charges at the office of the association at or prior to the dates fixed by the board of directors.

Section 7. BONDS AND INSURANCE  The board will require officers, employees and/or agents charged with responsibility for the custody of any corporation funds or other property to give bonds with sufficient surety to guarantee the faithful performance of their duties, the premium on which bonds shall be paid by the corporation.  The board shall provide adequate insurance covering liability for accidents to corporation employees and to the public.

Article V. DUTIES OF OFFICERS

Section 1.  The PRESIDENT shall preside over all meetings of the members and of the board of directors, call all meetings of the board, and sign the minutes of all meetings over which he presides; serve as judge of elections; sign all contracts and other documents he is so directed by the board; and perform all duties usually required of an executive and presiding officer.

Section 2. VICE-PRESIDENT   In the event of the absence or disability of the President or upon his request, the Vice-President shall serve in his stead.
 
Section 3. The SECRETARY-TREASURER SHALL:

a. Keep the minutes of the meetings of the members, and of the board of directors, and in each instance provide within the (10) days, to each member, or to each board member, a copy of such minutes.
 
b. Maintain the membership roll
 
c. Serve as custodian of all property of the corporation including the corporation seal.
 
d. Make such reports as shall be required by the Internal Revenue Service, the State Tax Commission, and the State Corporation Commissioner.
 
e. Maintain records covering withholdings from employees, for federal and state income taxes, and social security; and covering liability of the corporation for industrial accident, and unemployment compensation insurance; and remit to the proper federal and state agencies.
 
f. Maintain authorized insurance coverages.
 
g. Within ten (10) days after the close of each month reconcile the records of the corporation with those of the depository.
 
h. Be held responsible for the completeness and integrity of all accounting.
 
i. Receive and disburse all funds of the corporation under such regulation as shall be determined by the board of directors.
 
j. At each annual meeting make a full report on the business of the corporation.
 
k. Compile and make such other reports as may be requested by the board of directors and membership.
 
l. Shall maintain records sufficient to reflect the equity of each member in the assets acquired with the funds.

ARTICLE  VI. FINANCE
	Section 1. MEMBER INVESTMENT. Any contribution to capital of the corporation by members by funds or other than those accrued from the operation of the corporation shall be evidenced by a security or securities of equity character.

	Section 2. OPERATING FUNDS. The operations of this corporation shall be financed by membership dues payable by each member and for which he shall be entitled to one outlet from the main water supply line: and by service charges for  water service in addition to usage as measured by water metered to him.

	Section 3.  SERVICE CHARGES. For water service the board of directors, at the same meeting at which the annual dues are levied, shall fix the annual service charges. This calculated service charge figure shall be applicable to each main line outlet as measured by meter.

Section 4. EXPENSE ALLOCATION   At the close of each fiscal year there shall be deducted from the corporation's gross receipts for that year the total of all expenses including reserve for depreciation, labor, materials used in maintenance and repairs, any interest, any insurance including that covering injury to persons or damage to property, industrial accident and unemployment compensation; for taxes, fees and license, and any other expense; and the balance shall be allocated on the books of the corporation to the credit of the members in proportion to their patronage of business done with the corporation.
Section 5 .DISTRIBUTION OF NET SAVINGS  Subject to the provisions of section 7 of this article; there shall be deducted from any credits due a member as authorized by section 4 of this article any amounts due the corporation from membership fees, annual dues, annual service charges, or other; and any authorized deduction for working capital which deduction shall be credited to his capital reserve account, which account shall evidence a debt of the corporation; and the balance shall be paid to the member in cash.

Section 6. DEDUCTIONS LIMITED  Not less than twenty percent (20%) of the net savings as calculated pursuant to the provisions of section 5 of this article shall be paid to the member in cash.

Section 7. MEMBER CONSENTS TO TAXABILITY OF ALLOCATIONS TO HIS CREDIT  Each person who hereafter applies for and is accepted to the membership of this corporation and each member of this corporation on the effective date of this by-law who continues as a member after such date shall, by such act alone, consent that the amount of any distributions with respect to his patronage occurring after December 31, 1962, which are made in written notices of allocation (as defined in 26 U.S.C. 1388)  and which are received by him from this corporation, will be taken into account by him at their stated dollar amounts in the manner provided in 26 U.S.C 1385 (a) in the taxable year in which such written notices of allocation are received by him.
ARTICLE VII. AMENDMENTS
	These by-laws may be amended at any meeting of the members, by affirmative majority vote of the members of this corporation present provided notice setting forth the proposed amendment or a summary of the changes to be effected thereby shall have been included in the call for a meeting.
- - - - -McNulty Water Association Bylaws,  AB copy 4/12/98,   page 1- - - - -