By-laws

Revised 2001

Section 1. The corporate powers of this District shall be vested in the Board of Directors, hereinafter referred to as the Board.

Section 1. The purpose and objectives of this District are as follows:

(a) To acquire water and water rights and to build and acquire pipelines and other facilities, and to operate the same for the purpose of furnishing water for domestic, garden, livestock and other purposes to owners and occupants of land located within the District, and others as authorized by these Bylaws.

(b) To borrow money from any Federal or State agency, or from any other source, and to secure said loans by mortgaging or pledging all of the physical assets and revenue and income of the District, including easements and rights-of-way.

(c) To hold such real and personal property as may come into its possession by will, gift, purchase, or otherwise, as authorized by law, and to acquire and dispose of such real and personal property, including rights-of-way and easements, wherever located, and as may be necessary and convenient for the proper conduct and operation of the business of the District.

(d) To establish rates and impose charges for water furnished to participating members and others.

(e) To enter into contracts for the purpose of accomplishing the purposes of the District with any person or governmental agency.

(f) To cooperate with any person or with any governmental agency in any undertaking designed to further the purposes of the District.

(g) To do and perform any and all acts necessary or desirable for the accomplishment of the purposes of the District, which may lawfully be done by such District under the laws of the State of Kansas.

Section 1. Water shall be supplied only to land located within the District: Provided, however, that the Board may make water available to the public for purchase at such distribution points it may establish.

Section 2. The owner of land located within the District shall be eligible to become a water subscriber if he/she has: subscribed for one or more Benefit Units; been approved by the Board of Directors for the purchase of one or more Benefit Units; and has paid for one or more benefit units. Any tenant occupying land located within the District may become a water purchaser, provided that the owner of the land occupied by such tenant, or someone on behalf of such owner, in the fashion described in the immediately preceding sentence, has qualified as a water purchaser in favor of the land the tenant is occupying.

Section 1. Only participating members shall have the right to vote, and each participating member shall be entitled to a single vote, regardless of the number of Benefit Units owned. There shall be no proxy voting, and no dual ownership of Benefit Units for voting purposes. A participating member may be an individual, firm, partnership, association, or corporation.

Participating members shall be: Owners of land located within the District who have purchased one or more Benefit Units: Provided, payments of charges are current on at least one of the Benefit Units.

Section 1. Each Benefit Unit owner shall pay the minimum monthly meter charge from the time of purchase. Applications for Benefit Units shall be given preference and priority in the order in which they are received. The Board may refuse the application for a Benefit Unit in favor of a particular tract of land located within the District, or impose special conditions on granting the same if in the judgment of the Board, the granting of said application and the furnishing of water pursuant thereto, would impair the service to other water users in that locality or be uneconomical, unfeasible and place an undue burden on the District. Any landowner who feels himself aggrieved by such denial, or imposition of such special conditions, may appeal from the action of the Board to a vote of the members at the next regular meeting of the members or special meeting of the members called for such purpose: Provided, the decision of the Board shall stand, unless 3/4ths of all participating members vote in favor of a motion to overrule the decision of the Board.

Section 2. Upon the purchase of a Benefit Unit, the owners of land shall designate the tract of land to which the Benefit Unit shall be assigned, and the Benefit Unit shall not be transferred from one tract of land to another without the approval of the Board. The owner of land applying for more than one Benefit Unit to be assigned to one tract of land shall, at the time of said application, designate as nearly as practical the location on said tract where he intends to utilize said Benefit Units and no major change in location shall be made without the approval of the Board. Benefit Unit Certification shall be issued by the Board, signed by the Chairman and Secretary, showing name of owner, and tract of land to which the Benefit Unit is assigned, numbered consecutively in order in which issued.

Section 3. The consideration paid for Benefit Units shall be considered donations to the District and shall in no event and under no circumstances be refunded to the subscriber.

Section 4. Benefit Units shall follow the title of the land subject to the approval of the Board, unless the owner of the land designates otherwise. Owners may transfer Benefit Units from one tract of land to another tract owned by them within the District, subject, however, to the approval of the Board. No transfer in ownership of Benefit Units shall be permitted without the approval of the Board. No transfer will be approved unless all charges against the Benefit Unit are paid. All transfers, when approved, shall be recorded in the books of the District.

Section 5. Each Benefit Unit shall entitle the owner to not to exceed one line from the District’s water system. Each line shall serve, not to exceed, one residence or business establishment together with the necessary and usual outbuildings.

Section 6. Failure to pay the minimum monthly meter charge, or failure to pay for water used through a meter, shall constitute a forfeiture of the Benefit Unit on behalf of which such failure occurs: Provided, that such Benefit Unit shall be reinstated if within three months after such failure all back charges are paid in full, plus 6% interest and reasonable labor charges necessary to effect such reconnection: provided further, that the Board may permit such reinstatement within six months after such failure upon payment of all back charges, plus 6% interest, and reasonable labor charges necessary to effect such reconnection: provided further, that if the defaulting water subscriber is a tenant, the time set out above shall not commence to run until the Secretary of the District has mailed, or caused to be mailed, by registered or certified mail, notice of such default of the tenant to the landowner at his last known address as shown on the books of the District.

Section 1. The Board of this District shall consist of seven (7) members, all of whom shall be participating members of the District. The five (5) directors elected at the time of the incorporation of the District shall be elected for staggered terms of one, two and three years, and shall serve until the expiration of the term for which they were elected as shown by the minutes of the original meeting of the landowners, and until their successors are elected and have qualified at each annual meeting of the participating members, the participating members shall then elect for a term of three years the number of such directors whose terms of office have expired. The two (2) directors elected at the 2002 Annual Meeting of Participating Members shall be elected for staggered terms of one and two years, and shall serve until the expiration of the term for which they were elected as shown by the minutes of the 2002 Annual Meeting, and until their successors are elected and have qualified at each annual meeting of the participating members, the participating members shall then elect for a term of three years the number of such directors whose terms of office have expired. No person shall serve as a Director for more than two consecutive terms without a minimum of one year’s absence from the Board following the second consecutive term.

Section 2. Immediately following the annual meeting of the participating members, the Board shall meet and shall elect a Chairman, Vice-Chairman, Secretary and Treasurer, from among themselves, each of whom shall hold office until the next annual meeting and until the election and qualification of his successor unless sooner removed by death, resignation or for cause. The office of the secretary and treasurer may be held by one person.

Section 3. Any vacancy in the Board, other than from the expiration of a term of office, shall be filled by appointment by the remaining members of the Board.

Section 4. A majority of the Board shall constitute a quorum at any meeting of the Board.

Section 5. Any Director of the District may be removed from office for cause by a vote of not less than 3/4ths of the participating members of the District at any annual or special meeting called for that purpose. The Director shall be informed in writing of the charges preferred against him at least 10 days before such meeting, whether regular or special, and at the meeting shall have an opportunity to present witnesses and be heard in person in answer thereto. Officers of the Board may be removed for cause by vote of four of the members of the Board, and employees and agents discharged or removed from office or employment at any time by action of the Board.

Section 1. The Board, subject to the restrictions of law, and these Bylaws, shall exercise all the powers of the District and without prejudice to or limitation upon their general powers, it is hereby expressly provided that the Board shall have, and is hereby given, full power and authority in respect to the matters as hereinafter set out:

(a) To select and appoint all agents and employees of the District or remove such agents and employees of the District for just cause, prescribe such duties and designate such powers as may not be inconsistent with these Bylaws, and fix their compensation and pay for faithful services.

(b) To borrow from any source money, goods, or services and to make and issue notes, and other negotiable and transferable instruments, mortgages, deeds of trust and trust agreements, and to do every act and thing necessary to effectuate the same. The Board shall not have authority to encumber the District, during any 12 month time frame, for a project or groups of projects amounting to 30% or more of the District’s assets, as reported on the most recent audit, without obtaining a majority vote of the participating members attending any annual or special meeting called for the participating members of the District. The Board shall not have authority to enter into joint ventures or agreements, short or long term, with other entities that requires pledging a financial commitment equal to or greater than 30% of the District’s assets as reported on the most recent audit, without obtaining a majority vote of the participating members attending any annual or special meeting called for the participating members.

(c) To prescribe, adopt and amend, from time to time, such equitable and uniform rules and regulations, as in their discretion, may be deemed essential or convenient for the conduct of the business and affairs of the District, and the guidance and control of its agents and employees.

(d) To fix charges to be paid by each water user for services rendered by the District to him, the time of payment and the manner of collection, and to establish equal rates for farm members and non-farm members according to the amount of services furnished.

(e) To require all officers, agents and employees charged with the responsibility for the custody of any funds of the District, to give adequate bond, the cost thereof to be paid by the District, and it shall be mandatory upon the Directors to so require.

(f) To select one or more banks to act as depositories of the funds of the District and to determine the manner of receiving, depositing and disbursing the funds of the District in the form of checks, and the person by whom the same shall be signed on behalf of the District, with the power to change such bank or person signing such checks and the form thereof at will.

(g) Prepare annually an estimated budget for the coming year; adjust water rates, if necessary, to produce sufficient revenue required by such budget; cause an annual audit of the District’s records and accounts to be made by a licensed municipal public accountant or a certified public accountant, and make a report on said matters at each annual meeting of participating members.

(h) To appoint such committees, boards, groups or subcommittees composed of participating members of the District or landowners within the District as the Board deems appropriate, the members of which shall serve at the pleasure of the Board. Such committees, boards, groups or subcommittees shall have and carry out such duties and responsibilities as the Board shall, from time to time, assign to such committees, boards, groups or subcommittees.

Section 1. The board may employ a District Administrator, who shall have charge of the business of the District under the general control, supervision and direction of the Board. No Director shall serve as District Administrator. The responsibilities of the District Administrator are included as part of the administrator’s job description located in the Board Policy Book.

Section 1. Chairman. The Chairman, who shall be a member of the Board, shall preside over all meetings of the District and the Board; call special meetings of the District and the Board; perform all acts and duties usually performed by an executive and presiding officer; and sign all Benefit Unit Certificates and such other papers of the District as he may be authorized or directed to sign by the Board. The Chairman shall be authorized to sign checks as per Board Policy. The Chairman shall perform such other duties as may be prescribed by the Board.

Sections 2. Vice-Chairman. In the absence or disability of the Chairman, the Vice-Chairman, who shall be a member of the Board, shall perform the duties of the Chairman.

Section 3. Secretary. It shall be the duty of the Secretary, who shall be a member of the Board, to keep a record of the proceedings of the meetings of the Board and of the District. He shall serve, or cause to be served, all notices required to be served by law or the Bylaws of the District; and in case of his absence, inability, refusal or neglect to do so, then such notices may be served by any member of the Board as directed by the Chairman.

Section 4. Treasurer. The Treasurer, who shall be a member of the Board, shall receive and account for all funds of the District. He shall monitor the deposit of all funds in the District’s depository, the writing of all checks on the District’s accounts, the monthly reconciliation of the District’s accounts, and shall have the authority to cosign checks as authorized by Board Policy. At the annual meeting of the District, he shall submit, for the information of the participating members a complete statement of his account for the past year, and he shall discharge such other duties pertaining to his office as shall be prescribed by the Board, and he shall give a good and sufficient bond in such amount as may be fixed by the Board.

Section 1. The books and records of the District, and such papers as may be placed on file by vote of the District or Directors, shall, during all reasonable business hours, be subject to inspection by any member of the District.

Section 1. The annual meeting of the participating members of the District shall be held at some suitable location within the District, and upon a date designated by the Board in accordance with K.S.A. 82a-626 as amended. The current statutory requirement for annual meetings of members is that the meeting shall be held between January 1 and April 1 of each year.

Section 2. Special meetings of participating members may be called at any time by the Chairman or upon resolution of the Board, or upon written petition to the Chairman of the Board, signed by 51% of the participating members of the District. The purposes of every special meeting shall be stated in the notice thereof, and no business shall be transacted thereat except such as is specified in the notice.

Section 3. Notice of meetings of participating members of the District shall be given by mail to each participating member of record, directed to the address shown upon the books of the District, at least 10 days prior to the meeting. Such notice shall state the nature, time, place and purpose of the meeting, but no failure or irregularity of a notice of any annual meeting, regularly held, shall affect any proceeding taken thereat.

Section 4. The participating members present at any meeting of participating members shall constitute a quorum for the purpose of transacting business.

Section 5. The order of business at the regular meeting and so far as possible, at all other meetings, shall be:

(a) Call to Order;

(b) Proof of Notice of Meeting;

(c) Reading and approval of minutes of last meeting;

(d) Report of officers and committees;

(e) Election of Directors;

(f) Unfinished business;

(g) New business;

(h) Adjournment.

Section 1. The Board of Directors shall meet immediately following the Annual Meeting of participating members, for the purpose of electing the Chairman, Vice-Chairman, Secretary, and Treasurer of the Board. The monthly meetings of the Board of Directors shall be the fourth Wednesday of each month at the business office of the District, except November and December each year, when the meetings shall be the third Wednesday.

Section 1. At all meetings of the District, each participating member, qualified as stated in these Bylaws, shall be entitled to vote upon all propositions coming before said District. No cumulative voting shall be permitted and each participating member of the District shall have but one vote.

Section 1. The District shall have a corporate seal, consisting of a circle having in its circumference and face the words: “Rural Water District No.4, Douglas County, Kansas”, which shall be in the custody of the business office of the District.

Section 1. The fiscal year of the District shall begin the first day of October of each year.

Section 1. The Bylaws may be repealed or amended by a vote of 2/3rds of the participating members present at any regular meeting of the District, or at any special meetings of the District called for that purpose except that participating members shall not have the power to change the purpose of the District so as to impair its rights and powers under the laws of the State of Kansas, or to waive any requirement of bond or other provision for the safety and security of the property and funds of the District or its participating members, or to deprive any participating member or landowner of rights and privileges then existing, or to so amend the Bylaws as to affect a fundamental change in the policies of the District. Notice of any amendment to be made at any regular or special meeting of the participating members must be given at least 10 days before such meeting and must set forth the amendments to be considered.

Section 1. The District shall at all times be operated on a non-profit basis for the mutual benefit of its participating members.

Section 1. The District shall install, maintain and operate a main distribution pipeline or lines from the source of water supply, and lines from the main distribution pipeline or lines, to the property line of each participating member of the District, at which point, designated as delivery points, meters purchased shall be installed and maintained by the District. The Board shall have authority to establish cooperative agreements with other entities pursuant to the conditions in Article 8.

Section 2. Each participating member shall be entitled to purchase from the District, pursuant to such agreement as may from time to time be provided and required by the District and the Board, such water for domestic, livestock, garden and other purposes as a participating member may desire, subject however, to the provisions of these Bylaws and such Rules and Regulations as may be prescribed by the Board. The water delivered to each participating member shall be metered.

Section 3. In the event the total water supply shall be insufficient to meet all of the needs of the members and users, or in the event there is a shortage of water, the District may pro-rate the water available among the various members and users on such basis as is deemed equitable by the Board, and may also prescribe a schedule of hours, covering the use of water for garden purposes and require adherence thereto, or prohibit the use of water for garden purposes if at any time the total water supply shall be insufficient to meet all of the needs of all of the participating members for domestic, livestock, garden and other purposes, and the District must first satisfy all the needs of the participating members for domestic purposes before supplying any water for livestock purposes and must satisfy all the needs of all the participating members for domestic and livestock purposes before supplying water for gardens or other purposes.

STATE OF KANSAS

DOUGLAS COUNTY

Gary Lawson, Ted Crady, Sandra Lawson, John Gutschenritter and Eugene George, being first duly sworn, depose and state, each for himself, that he is a Director of Rural Water District No. 4, Douglas County Kansas that the foregoing Bylaws – Rules and Regulations are adopted at the Annual Meeting of the members of said District, duly held on the 22nd day of January 2001 at 7:30 O’clock P.M. That there was a Quorum present in person and that the vote for the adoption of the Bylaws carried by a majority vote.

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Gary Lawson

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Ted Crady

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Sandra Lawson

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John Gutschenritter

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Eugene George

Subscribed and sworn to before me this 8th day of January 2002

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Phyllis L. Stone, Notary Public