by laws

BY-LAWS

By-Laws for the regulation, except

as otherwise provided by statute or

its Articles of Incorporation, of

DONEY PARK WATER

(an Arizona Non-Profit Corporation)

ARTICLE I

Offices

Section 1.      PRINCIPAL OFFICE.      The principal office for the transaction of the business of the Doney Park Water (hereinafter the "Association") in Arizona is hereby fixed and located at: Doney Park Water, Route 3, Box 215, Flagstaff, Arizona 86004.

Section 2.      OTHER OFFICES.      The Association may also have offices at such other places both within or without the State of Arizona as the Board of Directors may, from time to time, determine or the business of the Association may require.

Section 3.      CORPORATE SEAL.      A corporate seal shall not be requisite to the validity of any instrument executed by or on behalf of the Association; but nevertheless, if in any instance a corporate seal be used, the same shall have inscribed thereon the name of the Association and the day and year of its organization.

Section 4.      REFERENCES TO ARTICLES.      Any reference herein made to the Association's Articles will be deemed to refer to its Articles of Incorporation and all amendments thereto as at any given time on file with the Arizona Corporation Commission ("ACC"), together with any and all certificates theretofore filed by the Association with the ACC .

Section 5.      SENIORITY OF ARTICLES.      The statutes of the State of Arizona will in all respects be considered superior to the Articles, with any inconsistency resolved in favor of said statutes. The statutes of the State of Arizona, the final Orders, and duly adopted rules and regulations of governmental agencies having jurisdiction thereover, including the ACC, and the Articles will in all respects be considered senior and superior to these By-Laws , with any inconsistency to be resolved in favor of the statutes, orders, rules and regulations, and Articles, and with these By-Laws to be deemed automatically amended from time to time to eliminate any such inconsistency which may then exist; provided, however, in all instances, these By-Laws shall be construed, whenever possible, to avoid such inconsistency.

ARTICLE II

Membership

Section 1.      MEMBERSHIP.      Any person, firm, association, corporation or body politic or subdivision thereof who is a bona fide resident of the area encompassed by the Certificate of Convenience and Necessity issued to the Association, having reasonable accessibility to the Association's water distribution system and being in need of water for domestic and municipal purposes may become a member of the Association by:

1)  Filing a written application for membership therein;

2)  Agreeing to purchase water service from the Association;

3)  Agreeing to comply with, and be bound by, the Association' s Articles of Incorporation and By-Laws, the rules and regulations adopted by the Board of Directors and/or promulgated by the ACC or other policy directives as may, from time to time, be adopted by the Board of Directors;

4) Paying a membership fee in the amount of Five Dollars ($5.00) or such other amount as may be fixed from time to time by the Board of Directors;

5) Paying all fees, including, but not limited to, connection fees, meter deposits and customer deposits; and

6) Executing a line extension agreement, if applicable. 

In no event shall any person, firm, association, corporation or body politic or subdivision thereof become a member unless and until he or it has been accepted for membership by the Board of Directors or the members.

Section 2.      BONA FIDE RESIDENT.      Any person, firm, association, corporation or body politic or subdivision thereof who requests water service where the Association's point of delivery is located within the area encompassed by the Certificate of Convenience and Necessity issued to the Association, who agrees to be liable for all costs, fees, charges, claims, and/or liability associated with delivery of water to that point of delivery and is either the owner of the land being provided water or the user of the water, is deemed a bona fide resident, as that term is utilized in Section 1, Article II, of these By-Laws and Article V of the Association's Re-Stated Articles of Incorporation .

Section 3. APPLICATION FOR MEMBERSHIP.  Application for membership shall be on a form prepared by the secretary of the Association. The Board of Directors, in the manner prescribed by the Board, shall determine the eligibility of the person for membership in this Association. In the event an application for membership has been completed and filed with the Association ninety (90) days prior to a meeting of members and the Board of Directors has either failed to act upon the application or has denied membership, the members may determine the eligibility of the person for membership in the Association, subject to compliance with the requirements hereinabove set forth.

Section 4.      MEMBERSHIP CERTIFICATION.      If the application for membership is favorably passed on by the Board of Directors or the members, the name and address of the member shall be entered in the records of the Association upon payment of all establishment, connection and other applicable charges or fees and execution of a line extension agreement, if applicable. The Board may issue membership certificates as evidence of membership in the Association. Such certificate shall be signed by the president or secretary of the Association and the corporate seal shall be affixed thereto.

Section 5. JOINT MEMBERSHIP.

(a)        A husband and wife and/or a landlord/tenant may apply for a joint membership as joint tenants with the right of survivorship and not as tenants in common or as community property, and subject to their compliance with the requirements set forth in Section 1 of this Article, may be accepted for such membership.

(b)        The person who holds legal title to the real property being served and otherwise qualifying for membership shall be vested with the right to apply for membership. A tenant shall only be permitted membership where the property owner:

i)                    Consents in writing;

ii)                   Is not eligible for membership

iii)                 Refuses to be the responsible party for water services; or

iv)                 Service is scheduled for disconnections and refuses to remedy the situation giving rise to the disconnect notice.

(c)        The term “member, as used in these By-Laws, shall be deemed to include a husband and

wife holding a joint membership, as well as a landlord/tenant holding a joint membership.  Any provisions relating to the rights and liabilities of membership shall apply equally with respect to the holders of a joint membership.

            (d)        Without limiting the generality of the foregoing, the effect of the hereinafter specified actions by or in respect of the holders of a joint membership shall be as follows:

i)                    The presence at a meeting of either or both shall be regarded as the

presence of (1) member and shall have the effect of revoking a proxy executed by either or both and of constituting a joint waiver of notice of the meeting;

ii)                   The vote of either separately or both jointly shall constitute one (1)

joint vote; 

iii)                 A proxy executed by either or both shall constitute one (1) joint

proxy;

iv)        A waiver of notice signed by either or both shall constitute a joint

waiver;

v)                  Notice to either shall constitute notice to both;

vi)                 Expulsion, death, termination or other withdrawal of either shall

terminate the joint membership; provided, however, the remaining joint tenant may apply for and be considered separately for membership and, if accepted, shall have all rights, privileges and obligations as if the membership had never terminated;

vii)        Either, but not both, may be elected or appointed as an officer or

director, provided that such appointee or electee shall meet the qualifications for such office; and

viii)              The payment of any capital credit to either separately or both

jointly shall constitute payment to both.   

            (e)        Where water service will be provided for use by more than one (1) person residing at the same location through the same meter (but not including master meters), the membership shall be deemed jointly held by each such resident who has reached the age of majority unless the application specifically requests individual membership and is specifically approved as an individual membership.

            Section 6.         LIMITATION ON MEMBERSHIP.  No member may hold more than one (1) membership in the Association and no membership in the Association shall be transferrable, except as provided in the Associations’ Articles of Incorporation or By-Laws, or by such procedure as duly adopted by the Board of Directors.

            Section 7.         CONVERSION OF MEMBERSHIP.  

            (a)        A membership may be converted from or to a joint membership upon written request of holder(s) thereof and the agreement by the member(s) to comply with the Articles of Incorporation, By-Laws, and rules and regulations adopted by the Board of Directors.  The records of the Association shall reflect the change in the membership status and any outstanding membership certificate shall be surrendered and shall be re-issued by the Association in such manner as shall indicate the change of membership status.

(b)        Upon the death of any person who is a party to a joint membership, such membership shall be held solely by the survivor. The outstanding membership certificate, if any, shall be surrendered, and shall be re-issued in such manner and the changed membership status shall be reflected on the records of the Association; provided, however, the estate of the deceased shall not be released from any debts due the Association.

(c)        The heir of a deceased member may succeed to said membership, in the manner prescribed by the Board of Directors, if otherwise eligible for membership and upon approval of the Board of Directors. The outstanding membership certificate, if any, shall be surrendered, and shall be re-issued in such manner and shall indicate the changed membership status; provided, however, the estate the deceased shall not be released from any debts due the Association.

Section 8.         PURCHASE OF WATER SERVICE.  Each member shall, as soon as water service shall be available, purchase from the Association all water purchased for use on the premises specified in his application for membership, and shall pay therefor at rates which shall, from time to time, be fixed by the Board;  provided, however, that the Board of Directors may limit the amount  

of water which the Association shall be required to furnish to any one (1) member.  It is expressly understood that production or use of water on such premises, regardless of the source thereof, by means of facilities which shall be interconnected with Association facilities, shall be subject to appropriate regulations as shall be fixed from time to time by the Association.

            Section 9.         TERMINATION OF MEMBERSHIP.

                        (a)        Any member shall be permitted to withdraw from this Association in the manner provided by the Board of Directors or rules and regulations of the Association; provided such withdrawal shall not affect any right or lien which the Association has against the retiring member or his property until such time the indebtedness to the Association is fully paid.

                        (b)        The Board of Directors may, by affirmative vote of not less than two-thirds (2/3) of all the directors, expel any member who fails to comply with any of the provisions of the Articles of Incorporation, By-Laws, or rules and regulations adopted by the Board of Directors, but only if such member shall have been given written notice by the Association that such failure makes him liable to expulsion and such failure shall have continued for at least ten (10) days after such notice was given.  Any expelled member may be reinstated by a majority vote of the Board of Directors or a majority vote of the members at any annual or special meeting; provided the cause for which the member was first expelled has been corrected.

                        (c)        In event a member at any time ceases to be eligible for membership as herein required, the membership theretofore shall terminate upon adoption a resolution by the Board Directors so stating, or upon appropriate entry in the membership records of the Association under the authorization of the Board of Directors.

(d)        The membership of a member whose service has been terminated and the meter

deemed abandoned under duly promulgated procedures adopted by the Board of Directors shall be cancelled by the resolution of the Board of Directors.

(e)                Upon the withdrawal, death, cessation of existence, or expulsion of the

 member,the membership of such member shall thereupon terminate, and the membership certificate, if any, of such member shall be surrendered forthwith to the Association. Termination of membership in any manner shall not release a member or his estate from any debts due the Association.

ARTICLE III

Meeting of Members

            Section 1.         PLACE OF MEETINGS.  All meetings of members shall be held at the principal office of the Association or at any place within the Associations’ certificated area, or within the City of Flagstaff.

            Section 2.         ANNUAL MEETINGS.  Annual meetings of the members shall be held each year on the first Monday in May, or such other date as determined by the Board of Directors by a resolution of said Board of Directors.  At such meeting, reports of the affairs of the Association shall be considered, and any other business may be transacted which is within the powers of the members.

            Written notice of each annual meeting shall be given to each member entitled to vote, either personally or by mail or other means of written communication, charges prepaid, addressed to such member at his address appearing on the books of the Association or given by him to the Association for the purpose of notice.  If a member gives no address, notice shall be deemed to have been given him if sent by mail or other means of written communication, addressed to the place where the principal office of the Association is situated, or if published at least once in some newspaper of general circulation in the county in which said office is located.   Where a membership is held jointly, notice duly provided hereunder to any of the joint members shall be notice to all the joint members.

            All such notices shall be sent to each member entitled thereto not less than ten (10) nor more than fifty (50) days prior to each annual meeting.  Such notices shall specify the place, the day, and the hour of the meeting and shall state such other matters, if any, as may be expressly required by statute.

            Section 3.         ANNUAL MEETING CALLED BY MEMBERS.  In the event the annual meeting is not held in any year as prescribed by Article III, Section 2 above, then any member may call such annual meeting within three (3) months after the Association's year end by providing notice as set forth in Section 2, and at such meeting, the directors may be elected and the members may transact other business with the same force and effect as at an annual meeting duly called and held.

Section 4.         SPECIAL MEETINGS.  Special meetings of the members, for any purpose or purposes whatsoever, may be called at any time by the president, or by the vice president, or by the Board of Directors, or by members holding not less than ten percent (10%) of the voting power of the Association.  Except in special cases where other express provision is made by statute, notice of such special meetings shall be given in the same manner as for annual meetings of members.  Notice of any special meeting shall specify, in addition to the place, day and hour of such meeting, the general nature of the business to be transacted.   

Section 5.         QUORUM.  The presence at any meeting in person or by proxy of ten percent (10%) of the members entitled to vote shall constitute a quorum for the transaction of any business that may be lawfully brought before the meeting; provided, however, that at any regular or special meeting of the members noticed for the purpose of amending, altering or repealing the By-Laws or adopting new by-laws for the Association, the presence, in person or by proxy, of at least twenty percent (20%) of the membership shall be necessary to constitute a quorum for the consideration of the alteration, amendment, repeal or adoption of new by-laws.  The members present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding withdrawal of enough members to leave less than a quorum.

            Section 6.         ADJOURNED MEETING AND NOTICE.  Any members meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of members present either in person or represented by proxy, but in the absence of a quorum, no other business may be transacted at such meeting.

                        When any members meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting.   Save as aforesaid, it shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted thereat, other than by announcement at the meeting at which such adjournment is taken.

Section 7.         VOTING.  Only persons in whose names membership is recorded on the membership records of the Association on the record date fixed Board of Directors shall be entitled to

Vote at such meeting.  Such vote may be viva voca or by written ballot.  Ballots shall be on a form provided by the Board of Directors. Joint memberships shall have only one vote. Members holding more than one meter shall have only one vote.

Section 8.         CONSENT OF ABSENTEES/WAIVER OF NOTICE.  The transactions of any meeting of members, either annual or special, however called and noticed, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy and if, either before or after the meeting, each the persons entitled to vote, but not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of such meeting, or an approval of the minutes thereof.  All such waivers, consents or approvals shall be filed with the corporate records and made a part of the minutes of the meeting.

Section 9.         ACTION WITHOUT MEETING.  Any action required by applicable Arizona law to be taken at any annual special meeting of members of the Association, or any action which may be taken at any annual or special meeting of such membership, except an amendment to the Articles of Incorporation, approval of an agreement for merger or consolidation of the Association with other entities, approval of the sale of all or substantially all of the assets of the Association, a voluntary dissolution of the Association, or election of directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the actions so taken, shall be signed by a majority of members having a right to vote thereon.  Prompt notice of corporate action taken without a meeting by less than unanimous written consent shall be given by those members who have not consented in writing to taking such action.

            Section 10.       PROXIES.  Every member entitled to vote or execute consents shall have the right to do so either in person or by one or more agents authorized by a written proxy executed by such person or his duly authorized agent and filed with the secretary of the Association.  Any proxy duly executed is not revoked and continues in full force and effect until an instrument revoking it, or a duly executed proxy bearing a later date, is filed with the secretary of the Association; provided any proxy may be revoked by the member who has executed the same when such member attends the meeting and desires to vote personally; and provided further, that no such proxy shall be valid after the expiration of eleven (11) months from the date of its execution, unless the member executing it specifies therein the length of time for which such proxy is to continue in force.

            Section 11.       LIST OF MEMBERS ENTITLED TO VOTE.  The secretary of the Association shall prepare and make, at least ten (10) days before any meeting of the membership, a complete list of the members entitled to vote at the meeting, arranged in alphabeticl order.  Such list shall be available at the Association’s principal place of business, during ordinary business hours, for a period of at least ten (10) days prior to the meeting.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any member who is present. 

            Section 12.       INSEPCTORS OF ELECTION.  In advance of any meeting of members, the Board of Directors may appoint any person, other than nominees for office, as inspectors of elections to act at such meeting or any adjournment thereof.  If inspectors of election are not appointed, the chairman of any such meeting on his own, or on the request of any member or his proxy, may make such appointment at the meeting.  The number of inspectors shall be as specified by the Board of Directors.

In case any person appointed as inspector fails to appear or fails or refuses to act, the vacancy may be filled by appointment by the Board of Directors in advance the meeting, or at the meeting by the chairman.

The duties of such inspectors shall include:  determining the number of members entitled to vote and the voting power of each, the members represented at the meeting; the existence of a quorum; the authenticity, validity, and effect of proxies; receiving votes, ballots or consents; hearing and determining all challenges and questions in any way arising in connection with the right to vote; counting and tabulating all votes or consents; determining the result; and such acts as may be proper to conduct the election or vote with fairness to all members.  Inspectors may appoint assistants from the membership, excluding directors, officers and nominees, for the purpose of counting and tabulating votes.

ARTICLE IV

Directors

            Section 1.         POWERS.  Subject to the limitations of the Articles of Incorporation, the By-Laws, and the Arizona General Non-Profit Corporation law as to action to be authorized or approved by the members, and subject to the duties of directors as prescribed by the By-Laws, all corporate powers shall be exercised by or under the authority of and the business and affairs of the Association shall be controlled by the Board of Directors.  Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the directors shall have the following powers, to-wit:

            First – To select, appoint and remove for cause all officers, agents or employees of the Association, prescribe such rules and designate such powers as may not be inconsistent with these    By-Laws, fix their compensation and require security for faithful service.

            Second – To conduct, manage and control the affairs and business of the Association, and to make such rules and regulations therefor not inconsistent with law, or with the Articles of Incorporation or the By-Laws, as they may deem best.

            Third – To change the principal office for the transaction of the business of the Association from one location to another within the same county as provided in Article I, Section 2 hereof; to designate any place within or without the State of Arizona for the holding of any members meeting or meetings; and to adopt, make and use a corporate seal, and to prescribe the forms of membership certificate and to alter the form of such seal and of such certificates from time to time as, in their judgment, they may deem best, provided such seal and such certificates shall at all times comply with the provisions of law.

            Forth – To borrow money and incur indebtedness for the purposes of the Association, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor.

            Fifth – To fix charges to be paid by each member for the services rendered by the Association to him, the time of payment and the manner of collection for the same will implement those charges in the manner authorized by these By-Laws and pursuant to law.

            Sixth – To designate one or more committees, each committee to consist of two or more directors of the Association, which committee or committees, to the extent provided in such resolution or resolutions creating same, shall have and may exercise, subject to the general direction, approval and control of the Board of Directors, the powers of the Board of Directors in the management of the business and affairs of the Association, or any part thereof, and may have power to authorize the seal of the Association to be affixed to all papers that may require same.

            Seventh – At least once each year, the Board of Directors shall order an audit of the books and accounts of the Association by a competent public auditor or accountant.  Reports submitted by such public auditor or accountant shall be submitted to the members of the Association at their annual meeting.  The Board shall also provide for such other audits as it shall deem desirable for the best interest of the Association.

            Eighth – The Board of Directors shall present at each regular meeting of the members and, when called for by a vote of the members, at any special meeting of the members, a full and accurate statement of the business and conditions of the Association.

            Ninth – To require all officers, agents and employees of the Association charged with responsibility for the custody of any of its funds or property to furnish adequate bonds.  Such bonds shall be furnished by a reasonable bonding company and cost thereof shall be paid by the Association.

            Section 2.         NUMBER AND QUALIFICATIONS OF DIRECTORS.  The number of directors shall not be less than five (5) nor more than seven (7) as determined by resolution of the Board of Directors from time to time.  The directors must be members of the Association.

            Section 3.         ELECTION AND TERM OF OFFICE.

            Section 3a.       Elections.          The election of directors shall be held annually on the first Monday of May.  Elections shall be deemed a special meeting of the membership.  Only persons in whose names membership is recorded on the membership records of the Association on the date fixed by the Board of Directors shall be entitled to vote in such elections.  Such a vote may be viva voice or by written ballots.  Ballots shall be in a form provided by the Board of Directors and may be cast in person, by proxy or by mail.  In order to be binding upon the membership, at least ten percent (10%) of the members eligible to vote must vote in the election.

            Where directors being elected will serve terms of unequal duration, the person receiving the highest number of votes shall fill the term of greatest duration.  A person need not receive a majority of the votes cast to be elected director.

            Section 3b.       Nomination Process.     The directors to be elected shall be nominated from the membership by a non-director nominating committee of not less than three (3) nor more than five (5) members appointed by the Board of Directors.  The committee shall report by mail to the membership of its list of nominees with the regular billings but not less than ten (10) days prior to the annual election.  Additional nominees may be named for inclusion on the ballot by petitions signed by not less than twenty-five (25) members of the Association and presented to the nominating committee at a time to be determined by the nominating committee, but in no event less than fifteen (15) days prior to the election.  Such nominating procedures shall constitute the sole means of placing the names of nominees upon the ballot for voting by the membership at the annual election.

            Section 3c.       Term of Directors.        When more than one director’s position is being filled by an election, the person receiving the most eligible votes cast shall be elected to the longest term.  Directors shall then and thereafter be elected for staggered three (3) year terms.

All directors shall hold office until their respective successors are elected and qualify or until earlier resignation or removal.

Section 4.         REMOVAL AND RESIGNATION.  Any director may be removed by a majority vote of the remaining directors at any regular or special meeting of the Board of Directors for reason of three (3) or more consecutive absences from regularly scheduled Board meetings. Any director may be removed, with or without cause, by a majority vote of the members at any regular or special meeting noticed for that purpose.

A director may resign from his position as director, and from any other office to which he has been elected by the members of the Association or by the Board of Directors, by a letter addressed to the secretary the Association. Such resignation shall take effect immediately upon the receipt of said notification by the secretary, and the secretary shall thereupon notify the remaining members of the Board.

Section 5.         VACANCIES.   Vacancies in the Board of Directors may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director.  A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors be increased, or if the members fail, at any annual or special meeting of members at which any director or directors are elected, to elect the full authorized number of directors to be voted for at that meeting.  At any meeting of the members noticed for that purpose, the members may elect a director or directors to fill any vacancy or vacancies not filled by the directors.

            The term of any director duly appointed to fill a vacancy on the Board will terminate at the next election of directors at which time, the members shall elect a director to complete the remainder, if any, of the original term.

            Section 6.         PLACE OF MEETING.  Regular meetings of the Board of Directors shall be held at any place within or without the State of Arizona which has been designated from time to time by resolution of the Board or by written consent of all members of the Board.  In the absence of such designation, regular meetings shall be held at the principal office of the Association.  Special meetings of the Board may be held either at the place so designated or at the principal office.

            Section 7.         ORGANIZATION MEETING.  Immediately following each annual election of directors, the Board of Directors shall hold a regular meeting for the purpose of organization, election of officers and the transaction of other business.  Notice and call of such meetings are hereby dispensed with.

            Section 8.         OTHER REGULAR MEETINGS.  Other regular meetings the Board Directors shall be held without call or notice at such time and at such place as shall, from time to time, be

determined by the Board of Directors and unless altered by the resolution of the Board of Directors shall be held on first Monday of each month.

Section 9.         SPECIAL MEETINGS.  Special meetings of the Board of Directors for any purpose or purposes shall be called at any time by the chairman of board, president or vice president, or by any two directors.  Written notice of the time and place the special meetings shall be delivered by mail or by other form written communication, charges prepaid, addressed to him at his address as it is shown upon the records of the Association, or if it is not so shown on such records or is not readily ascertainable, at the place at which the meetings of the directors are regularly held. In case such notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company at least three (3) days prior to the time of the holding of the meeting. In case such notice is

personally delivered as above provided, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting.   Such mailing, telegraphing or delivery as above provided shall be due, legal and personal notice to such director.  Attendance of a director at any meeting shall constitute a waiver of notice of such meeting except when attendance is for the express purpose of objecting to the manner is which the meeting was convened. 

            Section 10.       QUORUM.  A majority of the authorized number of directors shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided.  Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number is required by law or by the Articles of Incorporation of the Association.

            Section 11.       PARTICIPATION IN MEETING BY TELEPHONE.  Members of the Board of Directors or any committee designated by such Board may participate in a meeting of such Board or committee by means of conference telephone or similar communication equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at such a meeting.

Section 12.       WAIVER OF NOTICE.  The transaction of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice or a consent to holding such meeting or an approval of the minutes thereof.  All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minute of the meeting.

            Section 13.        ACTION WITHOUT A MEETING.  Unless otherwise restricted by the Articles of Incorporation or by these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or of such committee, as the case may be, consent thereto in writing setting forth the actions so taken, and the writhing of writings are filed in the minutes of the proceedings of the Board or committee.

            Section 14.       ADJOURNMENT.  A quorum of the directors may adjourn any directors meeting to meet again at stated day and hour; provided, however, that in the absence of a quorum, a majority of the directors present at any directors meeting, either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board. 

            Section 15.       NOTICE OF CONTINUATION.  Notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place be fixed at the meeting adjourned.

            Section 16.       FEES AND COMPENSATION.  Directors shall serve without compensation for their services, except for such reimbursement as and for expenses as may be fixed or determined by resolution of the Board; provided, however, that this provision shall not prohibit any officer of the Association being paid a reasonable salary or renumeration for services rendered. 

ARTICLE V

Officers

            Section 1.         OFFICERS.  The officers of the Association shall be a president, a vice president, a secretary and a treasurer.  The Association may also have, at the discretion of the Board of Directors, a chairman of the board, one or more additional vice presidents, one or more assistant secretaries, one ore more assistant treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article.  One person may hold two or more offices, except that the offices of president and secretary shall not be held by the same person.

            Section 2.         ELECTION.  The officers of the Association, except such officers as may be appointed in accordance with the provisions of Sections 3 and 5 of this Article, shall be chosen annually by the Board of Directors, and each shall hold his office until he shall resign or shall be removed or otherwise disqualified to serve, or his successor shall be elected and qualified.

            Section 3.         SUBORDINATED OFFICERS, ETC.  The Board of Directors may appoint, or may empower the president to appoint, such other officers, including, but not limited to, a general manager, as the business of the Association may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in the By-Laws or as the Board of Directors may, from time to time, determine.

            Section 4.         REMOVAL AND RESIGNATION.  Any officer may be removed, with or without cause, by the Board of Directors, at any regular or special meeting of the Board or except in the case of an officer chosen by the Board of Directors by any officer upon whom such power of removal may be conferred by the Board of Directors.

            Any officer may resign at any time by giving written notice to the Board of Directors or to the president, or to the secretary of the Association.  Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

            Section 5.         VACANCIES.  A vacancy in any office because of death, resignation, removal, disqualification, or any other cause shall be filled in the manner prescribed in the By-Laws for regular appointment to such office, at any regular or special meeting of the Board of Directors.

            Section 6.         CHAIRMAN OF THE BOARD.  The chairman of the board, if there shall be such an officer, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may, from time to time, be assigned to him by the Board of Directors or prescribed by the By-Laws.

            Section 7.         PRESIDENT.  Subject to such supervisory powers, if any, as may be given by the Board, if there be such an officer, the president shall be the chief executive officer of the Association and shall, subject to the control of the Board of Directors and the chairman of the board, have general supervision, direction and control of the business and officers of the Association.  He shall preside at all meetings of the membership and in the absence of the chairman of the board, or if there be none, at all meetings of the Board of Directors.  He shall have the general powers and duties of management, usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed by the Board of Directors or the By-Laws.

            Section 8.         VICE PRESIDENT.    In the absence or disability of the president, the vice president, shall perform all the duties of the president and when so acting, shall have all the powers of, and be subject to all the restrictions upon, the president.  The vice president(s) shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors.

            Section 9.         SECRETARY.  The secretary shall keep, or cause to be kept, at the principal place of business of the Association or such other place as the Board of Directors may order, a book of minutes of all meetings of directors and membership, with the time and place of holding, whether regular or special and, if special, how authorized, the notice thereof given, the names of those present at the directors’ meetings, the number of the members present or represented at members’ meetings, and the proceedings thereof.

            The secretary shall keep, or cause to be kept, at the principal office of the Association or the office of the Association’s statutory agent, a membership register, or a duplicate membership register, showing the name of the members and their addresses.

            The secretary shall give, or cause to be given, notice to all the meetings of the membership and the Board of Directors required by the By-Laws or by law to be given, and shall keep the seal of the Association in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by the By-Laws.

            Section 10.       TREASURER.  The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct account of the properties and business transactions of the Association, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and capital credits.  Any surplus including earned surplus, pain-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source shown in a separate account.  The books of account shall be at all reasonable times open to inspection by a director.

ARTICLE VI

Committees

Section 1.         COMMITTEES.  The Board of Directors may, from time to time, by resolution or resolutions adopted by the affirmative vote of a majority of the directors in office at the time of adoption of such resolution or resolutions, appoint such committees as the said Board may deem advisable and such committees shall have such authority and shall perform such duties as from time to time may be prescribed by the Board of Directors.  Members of such committees shall hold office until completion of their duties and dismissal by the Board of Directors.  The Board of Directors may dissolve such committees at any time by majority vote.

ARTICLE VII

Record Date

Section 1.  FILING RECORD DATE.

(a)                             In order that the Association may determine the members entitled to notice or to vote at any meeting of the members or any adjournment thereof, or allotment of any rights, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action.

(b)                             If no record date is fixed:

i.)      The record date for determining members entitled to notice of or to vote at a

          meeting of members shall be at the close of business on the day next preceding the

          day on which notice is given. 

ii)                   The record date for determining members for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

iii)                 A determination of members of record entitled to notice of or to vote at a meeting of members shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

(c)  Only members of record on the date fixed under (a) or (b) above shall be entitle to such notice of and to vote at such meeting and any adjournment thereof or entitled to exercise any such rights or for the purpose of any other lawful action or to give such consent, as the case may be, notwithstanding any transfer of any membership on the books of the Association after any such record date fixed as aforesaid.

ARTICLE VIII

Indemnification

            Section 1.         INDEMNIFICATION OF OFFICERS AND DIRECTORS.  The Association, to the full extent permitted by law, may indemnify any and all of its directors, officers, employees and agents against expenses incurred by them, including legal fees, or judgments or penalties rendered or levied against any such persons in a legal action brought against any such persons for actions or  omissions alleged to have been committed by any such person while acting within the scope of his employment as a director, officer, employee or agent of the Association, provided that the Board of Directors shall determine, in good faith, that such person acted, or failed to act in good faith, and in a manner he reasonably believed to be in or not opposed to the best interests of the Association and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.  The Association may purchase and maintain liability insurance on behalf of any or all such persons to the full extent permitted under Arizona law.

ARTICLE IX

            Section 1.         METER READING – BILLING – COLLECTING.  All activities of the Association in regard to the reading of meters, billing for services and collecting payments due and owing for services rendered shall be in the manner provided by rules and regulations adopted by the Board of Directors and/or as approved by the ACC or otherwise permitted by law.  All water rents for any calendar month shall be paid monthly and bills rendered monthly.  Bills for water will be figured in accordance with the Association’s published rate schedule as approved by the ACC and will be based on the amount consumed for the period covered by the meter reading (except where estimations are necessary).  Failure to receive bills and notices shall not prevent such bills from becoming delinquent nor relieve the consumer from payment.  Collection of bills for services rendered the consumer by the Association may be enforced by filing an action in any court of competent jurisdiction in the usual way provided by law for the collection of debts.

ARTICLE X

Capital and Surplus

            Section 1.  The capital of the Association shall consist of (1) such funds as the Association may be granted or may borrow from its members or other sources, and (2) any other properties which the Association may own, build or acquire through toll charges or otherwise.

            Section 2.  Subject to the limitations imposed by statue or the Articles of this Association or By-Laws, the Board of Directors may, upon resolution duly adopted by a majority of the whole Board, at the regular February meeting provide for the distribution of any surplus of the Association.  Before any such distribution is made, the directors must set aside a fund sufficient to provide for all current obligations outstanding, including amortization and interest charges and, in addition, the directors may set aside such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for repairing or maintaining of any property of the Association, or for such other purposes as the directors shall think conducive to the interest of the Association, and the directors may abolish any such reserve in the manner in which it was created. 

ARTICLE X1

Miscellaneous

            Section1.          CHECKS, DRAFTS, ETC.  All checks, drafts, or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Association, shall be signed or endorsed by such person or persons and in such manner as from time to time shall be determined by resolution of  the Board of Directors.

            Section 2.         CONTRACT, ETC., HOW EXECUTED.  The Board of Directors, except as otherwise provided in the By-Laws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Association, and such authority may be general or confined to specific instances; and, unless so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the Association by any contract or engagement or to pledge its credit or to render it liable for any purpose or to any amount.

            Section 3.         FISCAL YEAR.  The fiscal year end of the Association shall be designated and determined by the Board of Directors from time to time and, until amended, shall be December 31.

            Section 4.         REPRESENTATION OF SHARES OF OTHER CORPORATIONS.  The president or any vice president of this Association is authorized to vote, represent and exercise on behalf of this Association all rights incident to any and all shares of any other corporation or corporations standing in the name of this Association.  The authority herein granted to said officers to vote or represent on behalf of this Association any and all shares held by this Association and in any other corporation or corporations may be exercised either by such officers in person or by any other person authorize so to do by proxy or power-of-attorney duly executed by said officers.

            Section 5.         CONSTUCTION AND DEFINITIONS.  Unless the context otherwise requires, the general provisions, rules of construction and definitions contained in the Arizona General Non-Profit Corporation law shall govern the construction of these By-Laws.  Without limiting the generality of the foregoing, the masculine gender includes the feminine and neuter; and the singular number includes the plural and the plural number includes the singular; and the term “person’ includes a corporation as well as a natural person.

ARTICLE XII

Amendments of By-Laws

            Section1.          POWER OF DIRECTORS.  The Board of Directors shall have the power to amend, alter or repeal these By-Laws, and to adopt new By-Laws from time to time by an affirmative vote of a majority of the whole Board as then constituted, provided that notice of the proposal to make, alter, amend or repeal the By-Laws of this Association was included in the notice of the directors meeting at which such action takes place.

            Section 2.         POWER OF MEMBERS.  The members of the Association shall have the power to amend, alter or repeal these By-Laws, at any regular or special meeting of the members noticed for that purpose, provided that a majority of the membership present shall authorize the action.

CERTIFICATION

            I hereby certify that the foregoing By-Laws were adopted by the Board of Directors of the Association at the meeting called for that purpose on the _16__ day of _      February _______, 1990.