TRANQUIL ACRES WATER SUPPLY, INC.

BY-LAWS

Adopted 1976, revised in 1978, 1979, 1980, 1981, 1982, 1983, 1984, 1985, 1987, 1988, 1992, 1993, 1994, 1995, 1996, 1997, 1999, 2001, 2003, 2004, 2005, 2007, 2008, 2010, 2011, 2012, 2014, 2015, 2017, 2018, 2020, and 2022.

ARTICLE I: PURPOSE

Sec. 1: These By-Laws accepted by a majority of members are the governing rules, in conjunction with our Articles of Incorporation and with State corporation law (such as, the "Colorado Revised Nonprofit Corporation Act"), by which the Board of Directors of Tranquil Acres Water Supply, Inc., shall conduct the business of the corporation.

ARTICLE II: MEETINGS

Sec. 1: An Annual Meeting of the members shall be held on the third Saturday in June of each year. Except for the Annual Meeting, there shall be no other regular meetings of the members. At least 5 members must be present (either in person, electronically, or by proxy) in order to establish a quorum for Annual Meetings; unless the Corporation has fewer than 9 members in total, in which case at least 50% of the members must be present to establish a quorum. Changes and/or amendments to these by-laws may only be voted on and approved at the Annual Meeting—with the exceptions of changes in water usage fees, changes in tap-on fees, and amendments for one-time special assessments in times of financial emergency, any of which may also be amended at regular meetings of the Board of Directors, but only after all members have been notified of the proposed change at least 30 days in advance. Members will then have the opportunity to give their input on the proposed change at a regular Board meeting, before any vote can be taken by the Board.

Sec. 2: Special meetings of the members may be called at any time it is deemed necessary by the President, a majority of the Board of Directors, or 25 percent of the members entitled to vote at the last regular meeting of the membership. Notice of any such Special Meeting must be given to members at least 10 days, but not more than 50 days, in advance.

Sec. 3: Each member in good standing may vote at any Annual or Special Meeting, either in person, by absentee ballot, or by proxy (authorized in writing by the member or his attorney in fact).

ARTICLE III: OFFICERS AND DIRECTORS

Sec. 1: a. The Board of Directors shall be composed of seven (7) members. Seven (7) members shall be elected by the membership, each for 3-year terms.

b. The Board of Directors may fill any vacancy on the Board occurring after the Annual Meeting, and the person appointed shall serve until the next Annual Meeting at which time that position will be up for election for a new three-year term.

c. Board members shall be expected to diligently discharge their duties and responsibilities which in part requires regular attendance at the meetings of the Board of Directors. Failure to attend at least 50 percent of such meetings within a six (6) month period is cause for vacating their term of office with approval of the Board of Directors. The President shall declare the seat vacant and shall appoint, with the approval of the Board of Directors, a member to fill the vacancy until the next scheduled Annual Meeting. At least three (3) board members must be present in order to establish a quorum for Board meetings.

Sec. 2: The officers of this Corporation shall consist of a President, Vice President, Secretary, and a Treasurer. The Officers shall be elected by the Board of Directors. Officers shall serve until the next regular meeting or until their successors are appointed.

Sec. 3: a. A written petition containing the signatures of at least 51 percent of the total active membership shall be required to initiate a recall vote of a member of the Board of Directors.

b. Upon removal of a Board Member, the President (or Vice President upon the removal of the President) shall declare the seat vacant and shall direct that nominations and elections be held.

ARTICLE IV: DUTIES OF OFFICERS

Sec. 1: President. The President shall preside at all meetings of the members and shall call such meetings as he, the Board of Directors, or 25 percent of the members deem necessary. The President shall instruct the secretary to send notices of such meetings to all members. The President shall be a member of the Board of Directors. The President shall appoint a responsible person or committee of not more than three (3) members to audit the Treasurer's books at the close of business in June of each year.

Sec. 2: Vice President. The Vice President shall act in the absence of the President in all cases and whenever necessary.

Sec. 3: Secretary. The Secretary shall maintain and be responsible for the official records of the Corporation, and shall have in the records at all times a copy of the official incorporation papers, a current up-to-date set of By-Laws and a complete list of names and addresses of all members. The Secretary shall also maintain in the official records, any maps, diagrams, papers, or any other document the Board of Directors deems necessary to keep in the official records of the Corporation.

Sec. 4: Treasurer. The Treasurer shall be the general finance officer of the Corporation and have the responsibility for the funds and keeping a true and accurate account of all the receipts and disbursements of the Corporation.

Sec. 5: Board of Directors. a. The Board of Directors shall be the governing body for the Corporation.

b. Notice of Annual Meeting. The Board shall prepare and submit to each member, at least 30 days prior, a Notice of Annual Meeting, including the date, time, and place of the meeting.

c. Proposed By-Law Changes. The Notice of Annual Meeting shall include any known By-Law changes intended to be proposed at the Annual Meeting. Proposed By-Law changes may be altered or amended at the Annual Meeting; and new proposals from any member may be considered, so long as such proposals have not been purposely withheld from the Notice of Annual Meeting. By-Law changes require approval of a simple majority (over 50%) of the vote.

d. Proposed Annual Budget. The Notice of Annual Meeting shall include a proposed budget for the next fiscal year. The budget shall be presented at the meeting and adopted, either as submitted or as amended, by a vote of the majority of the members. At subsequent meetings, the Board, upon resolution which outlines the specific reasons and necessity therefore, may authorize expenditures not to exceed ten percent (10%) of the approved annual budget. If an expenditure is required which exceeds ten percent (10%) of the annual budget, it must be approved by the members.

e. Financial Report. The Board shall prepare and make available, upon either written or verbal request, to each member an Annual Financial Report not later than August 15th of each year. This report shall include the approved Annual Budget, Profit/Loss Statement, and Balance Sheet for the end of the previous fiscal year. Additionally, a preliminary draft of the Annual Financial Report must be presented to all members at the Annual Meeting.

f. Summary of Annual Meeting. The Board shall prepare and submit to each member, not later than August 31st of each year, a written summary of the most recent Annual Meeting.

g. Treatment Plant Operator. The Board shall hire (either as an employee or as a sub-contractor) a Treatment Plant Operator. The Treatment Plant Operator (TPO) shall be certified as required by the Colorado State Department of Health. They shall perform the duties of disinfection, sampling, reporting, and record keeping as required to assure that the Corporation is in compliance with directives issued by the Colorado State Department of Health as they pertain to this water system; and shall advise the Board of any changes to these directives, and of any noncompliance items existing within the system. The TPO shall coordinate their activities with other Corporation employees, as directed by the Board. The TPO shall not obligate the Corporation for any expenses, without the approval of the Board.

h. Other Employees. The Board may hire, under their sole direction and supervision, any number of employees or sub-contractors, deemed necessary to carry out the legitimate functions and purpose of the Corporation, as defined in the Articles of Incorporation. Examples of such hired help could include: Caretakers, System Monitors, Accountants, Bookkeepers, Office Managers, Meter Readers, Lawyers, Consultants, Equipment Operators, Craftsmen, and other Laborers. The Board shall provide all employees with a written Job Description. Employees and/or sub-contractors may not obligate the Corporation for any expenses, without the approval of the Board.

i. Backhoe and Other Equipment. The Board shall be responsible for all equipment, including the backhoe, that the Corporation may possess. The Board shall develop and publish policies and procedures relating to the operation, priority of use, the operators, maintenance, and the supplies required for this equipment. The first priority usage of all equipment shall be to facilitate the repair, maintenance, and improvements to the existing water supply system. Operation of the equipment shall be limited to the subdivisions of Tranquil Acres (which includes Melody Acres) except during governmental declared disasters. Only qualified operators approved by the Board shall operate the equipment, except for trainees under the supervision of a trainer approved by the Board. Fee schedules, operator salaries, and helper salaries shall be determined by the Board. Use of the equipment on private properties of members shall not be permitted except for improvement of system facilities, without the approval of the Board.

j. Additional Limits On Board Actions And Authority. The Board shall be required to obtain approval from the full membership before undertaking any of the following actions: to make expenditures or purchases in excess of 10% of the approved annual budget; to obligate the corporation to any long-term debt (where the terms of the debt exceed one year); to expand service to any property or customer outside of the currently recognized boundaries of "Tranquil Acres" subdivision and its associated platted additions and tracts currently holding paid-for taps; or, to alter or amend the corporation's water augmentation plan as filed with the State Water Court. Approval shall be obtained through a simple majority vote (over 50% of ballots cast) at either the Annual Meeting or at a Special Meeting of the members.

ARTICLE V. FEES

Sec. 1: Necessity. In order to achieve the purposes for which this Corporation is created, it is necessary to levy fees on all members in the Corporation. The levying of fees is necessary in order to operate and maintain this water supply system so that the members may obtain a water supply from the system. Any changes in the fees established by these By-Laws may only be made by amendment of the By-Laws by those members entitled to vote thereon.

Sec. 2: Annual Membership Fee. To become and continue to be a Class A or Class B member in good standing of this Corporation, each property owner shall pay an annual membership fee of ten dollars ($10.00). The fee shall be due on January 31 and shall be paid on or before February 15 of each year and except for new property owners who join after February 15, shall be a condition required to be entitled to vote or participate in the annual meeting in June of each year. Late payment of the fee shall entitle the member to vote and otherwise participate in the Corporation at all times other than the annual meeting, and "to participate" shall mean "to use water" and other privileges. The fees collected may be used for any corporate purpose as determined by the Board of Directors.

Sec. 3: Water Fees.

a. Tap-on Fee. There shall be a tap-on fee of ten thousand dollars ($10,000.00) by all new water users before service is installed to their property. The tap-on fee shall include a residential water meter of the then current approved kind and style. The installation of the water meter shall be at the property owner’s own expense. Each user shall pay for his own installation from any Corporation main line to the property line unless a written agreement is signed by the property owner and a representative of the Board which details the responsibilities of each party in the installation. The user shall pay all costs of installation on his property, except that the Corporation shall provide the property shut off valve and determine its location. Users with wells must provide an air gap, or space, between private water sources and Tranquil Acres' water system in order to physically separate the two--check valves and hand valves are not allowed in such instances, according to Colorado State Health Department laws. Users with cisterns or storage tanks must pipe their systems in such a manner as to prevent backflow to Tranquil Acres water system, regardless of pressure differences involved. Property owners must meet these requirements at their own expense. If a user is required to install and pay for lines beyond his property line, any new user who subsequently pays a tap-on fee and taps into such line, shall, before any service is provided, pay his pro-rata share of the original cost of such lines based on his front footage as a percentage of the front footage of the line installed to the original user or his successor who paid the installation costs. Proof of any previously paid-for water tap-fee lies with the property owner. No new tap-on fee shall be due from any property owner as a condition precedent to reinstatement of water service after a shut-off for nonpayment of fees or any other reason. Once a water tap is paid for and assigned to a specific lot, the tap may never be assigned to any other lot except when an adjoining property line is legally vacated.

b. Usage Charges. Monthly usage charges, when water is supplied to a property through the normal distribution system, shall be: a base rate of $115.00 for the first 4,200 gallons; overage usage above 4,200 gallons each month will be charged at the following rates; 4,201 gallons to 5,000 gallons - $0.08 per gallon, 5,001 gallons to 6,000 gallons - $0.12 per gallon, 6,001 gallons to 7,000 gallons - $0.15 per gallon, 7,001 or more - $0.20 per gallon; excepting when a property becomes vacant and service is shut-off, or when water is not available through the normal distribution system (such as freeze-ups, broken lines, or for users who haul water) and the Office Manager, Bookkeeper, and/or Secretary is duly notified. The Board may then prorate the minimum monthly fee based on any water used in such circumstances. Regular monthly usage charges will be billed by the 10^th day of the month following the month of usage and are due by the end of the month in which the usage bill was submitted. New users (including renters) and part-time users must pay the prorated rate for the remainder of the first month of use, plus a one month minimum fee in advance before water is turned on. In the event that the user is on the system for a total of less than one month, a minimum of one full month's usage will still be charged.

[c. Summer Use Charge. -- deleted as of 6/26/2010.]

d. Responsibility for Fee Payments. Property owners are responsible to see that water fees are paid!

e. Unusual Circumstances. The Board of Directors shall determine fees for unusual circumstances not presently covered providing such fees are fair and appropriate. The Board of Directors shall act promptly upon any disputed fees and their decision shall be final unless the members vote otherwise at the Annual Meeting.

f. Delinquency. Delinquent users shall not have use of the water supply system, and shall be liable for any costs incident to the shut-off and rehook-up of such service, except that no new tap-on fee shall be required. Final notice of delinquency will be given property owners. If accounts are not paid in full within thirty (30) days, necessary legal steps will be taken. Legal fees will be added to users total bill. A late fee of twenty dollars ($20.00) per month will be assessed to all accounts which are 60 days or more delinquent, for each full month the account is delinquent.

g. Turn-On/Shut-Off Fee. The minimum fee to turn-on/shut-off water service to a property for new users (including renters) and part-time users shall be forty dollars ($40). These fees are due prior to each and every time new or part-time service is begun. Additional fees may be assessed if the required valves for turn-on/shut-off are damaged or obstructed. All past debts on the account must be settled prior to water service turn-on. Only persons authorized by the Board of Directors shall turn-on/shut-off, or otherwise adjust, system valves.

h. Use of Fees. All fees collected under this section shall be used solely for the maintenance, repair, replacement, and operation of the water system by the Board of Directors.

i. Multiple Family Use Fee. Multiple family residents on a single lot shall require multiple water use fees when occupied, and they shall be presumed to be occupied unless the property owner notifies the Treasurer of a vacancy.

j. Augmentation Fees. An augmentation fee of six hundred dollars ($600.00) per tap was assessed each tap-owner over a 10-year period beginning in July of 1987. This six hundred dollar fee must be paid for each and every old tap, whether previously installed or not, before service will be restored or connected to that lot.

k. Rehook-up Fees. A rehook-up fee of no more than one thousand dollars ($1,000.00) will be charged to tap owners who have been on the system in the past, but have had their physical connection to the TAWS water distribution system severed due to disuse. This fee may be lowered, or waived, by the Board if the actual costs to restore service to a particular severed line are significantly lower than five hundred dollars ($500.00).

l. Household Meters. All TAWS water users on the normal distribution system shall be required to install and maintain approved water meters and check-valves to their properties by October 31, 2004 (after which time, water service will be disconnected to residences without such meters and valves). TAWS representatives must be permitted to inspect meter systems, upon 24 hour notice. Tampering of meters by users is not allowed, and may result in a fine as determined by the Board of up to five-hundred dollars ($500.00).

ARTICLE VI: COMMITTEES

Sec. 1: Committees shall be appointed by the Board of Directors as deemed necessary.

Sec. 2: The Board of Directors shall appoint a nominating committee, consisting of no more than five (5) members, which shall be appointed each year three (3) months prior to the regular meeting for the purpose of nominating candidates to the Board of Directors for the coming year.

ARTICLE VII: WATER USE REGULATIONS

Sec. 1: Guarantees. The Corporation does not guarantee any resident of Tranquil Acres a supply of water.

Sec. 2: Water Leaks. In case of obvious water leaks on private property, the Caretaker may take action necessary to shut off the water on their property. The owner of the property is to bear the cost of shut-off and water service will not be restored until the leak is repaired and all expenses paid. Any water lost due to leaks or misuse on the user's property may be added to their total bill. Property owners are required to notify the TAWS Bookkeeper/Office Manager either in writing, via email, through voicemail, or in person, to request water shut-off within 24 hours of vacating a property which is currently on our system.

Sec. 3: Usage. All Tranquil Acres Water Supply, Inc., water is supplied to users for inhouse use only. That is, TAWS water may not be used for gardens, lawns, washing cars, livestock, or other uses prohibited by Colorado State Law as it relates to our water augmentation plan.

Sec. 4: Valves. No one other than the Caretaker (or another duly assigned representative of the Board) is to turn on or off, or otherwise tamper with, system valves. The Caretaker's actions shall be by the order of the Board of Directors, except in emergency situations. Violators will be prosecuted, under penalty of law. Valves, meters, standpipes, and any other system equipment which have been tampered with may be secured and/or disconnected from the system, and the property owner shall be responsible for any expenses incurred to disconnect and to reconnect the user to the system. Property owners may not obstruct access to any valves, meters, standpipes, or other system equipment situated on the owner's property. Property owners must also take reasonable precautions to avoid damaging any system equipment. Otherwise, TAWS may make any needed repairs and charge the cost of such repairs to the property owner.

Sec. 5: Cross Connection (Backflow Contamination Prevention). As required by The Colorado Primary Drinking Water Regulations [Regulation 11, Section 11.37(3)], TAWS is required to have a backflow prevention plan. TAWS is also required to perform a survey of all customers’ property to determine whether cross connections are present. TAWS requires its customers to comply with the regulation’s requirements and to install, maintain, test, and inspect backflow prevention assemblies and/or backflow prevention methods. The regulations require the inspections of all known cross-connections which shall be subject to initial inspections by TAWS or its authorized agents immediately. Beginning December 31, 2020, all known cross-connections shall be inspected annually by TAWS or its authorized agents. TAWS has the authority to ensure compliance with these regulations and to shut off water service to any non-compliant customer.