Golden Valley ID Policy & Procedure

EXHIBIT A

GVID #1 POLICY & PROCEDURE MEMORANDUM No. 90-1 AMENDMENT NO. 24-1

Article 1 – Preamble

Section 1.1 The Golden Valley Improvement District through its Board of Directors establishes the following policies and procedures. They are intended to outline the intent of the Board with regard to the entire operation of the District. The Board realizes the wishes of the residents of the District may change from time to time and anticipates corresponding changes to these policies.

Section 1.2 The water utility the GVID has constructed will be operated in an efficient, economic and environmentally sound manner, in accordance with all Federal, State, and Local rules and regulations. The District will provide safe drinking water in conformance with all the regulations of the USEPA, ADEQ and ADWR.

Section 1.3 The District’s water source, the aquifer underlying Sacramento Valley, will be protected to the fullest extent possible. At present we have tapped that aquifer and have sufficient water to serve approximately 5010 units. A unit is defined as a residential unit allocated 200 gallons of water per day (GPD). As the District grows it is anticipated the aquifer will be tapped to provide additional water. One meter connection will service only one single-family residence.

The Board realizes water is a limited commodity and therefore encourages conservation. It has structured its water rates accordingly penalizing those who use larger quantities. The Board further recognizes the value of the aquifer and will take every step possible to oppose attempts to obtain, sell or transfer water from the District, or the Valley.

Article 2 – Expansion of Service

Section 2.1 Annexation to the District is possible. The Board, however, realizing the responsibility it has to serve the existing district will not actively seek out annexation. It will be District priority to provide water to the customers within its boundary as exists upon the adoption of this PPM. If annexation is approved a development fee equal to the tax computed from tax rates and assessed values in effect on the day of annexation times the number of years between 1976 and the annexation will be assessed. This development fee will be in addition to any assessments or enlargement fees necessary to enact to provide water to the area annexed. The development fee collected shall be deposited in the O & M account of the

District.

Section 2.1.1 The Board of Directors placed a five-year moratorium on all annexations to the District and an option for five more, when adopting these policies on January 7, 1991.

Section 2.2 – Water Access Rights Initially each parcel of land within the District was equated to a certain number of service connections or water access rights in accordance with the following table:

Table 1

Parcel Gross Acreage

Service Connections

0 – 19

20 – 29

30 – 59

60 – 119

120 – 239

240 – 479

480 – 640

There were 4,989 total service connections when the original assessments were filed in December of 1990.

It is the policy of the Board that each of those service connections equates to 200 gpd of water. Furthermore it is Board Policy that property owners may sell these connections to other property owners in the District provided each parcel maintains one service connection. Before any such transaction is official, documentation of said transaction, signed by both parties, must be presented to and approved by the Board. Any District charges including assessments that are outstanding shall be paid in full before any request for transfer is presented.

As additional sources of water are acquired, the Board expects the water access rights to be allocated similarly.

Section 2.3 Future Development As lands within the district develop, the existing system may not be adequate to supply the needed water for those developments. The District will look to the developer to pay the cost of increasing the capacity of the system to serve the proposed development. Depending on the size of those developments the cost may be that of drilling a new well or constructing a new storage tank or laying new water lines or all of the above.

For each major development, an engineering analysis will be made by an Engineer approved by the Mohave County Public Works Director (1) to determine the impact of each major development, (2) to evaluate the 100-year adequacy of the groundwater supply in addition to and separate from the existing District water allocations, (3) to verify that the proposed groundwater withdrawal rate will not cause direct or consequential damage to the District or other water suppliers drawing from the same aquifer, and (4) to verify that adequate additional service connections can be obtained which are properly permitted by the applicable government agencies, including the Arizona Department of Water Resources (ADWR). The cost of all engineering work shall be paid by the Developer.

Additional allocations, determined through the above engineering study by the Developer, shall be turned over to the District, which in tum, shall make those allocations available for purchase by the developer for the Subdivision.

In the event the District has an adequate water supply and distribution capacity and no system modification is necessary, the developer shall pay a water access rights fee equal to the initial well and backbone distribution assessment $474.72/residential unit. However, commencing February 20, 2018 and continuing until this policy is again changed, the developer or other person seeking new or additional water access rights shall pay the water access right fee of $5,200 per service connection plus an annual fee increase of $150.00 per year beginning Calendar Year 2019.

Section 2.4 – Subdivisions, Lot Splits The supply of water to the District is limited. The number of service connections is directly related to that supply. Therefore, before subdivisions are approved water adequacy will have to be proved. The owner or developer wishing to split a lot or subdivide a parcel will either have to acquire water access rights in accordance with Section 2.2 or fund the system enlargement in accordance with Section 2.3. Arizona law allows a lot split but that in no way guarantees a water access right for any lot.

The developer shall then be responsible for the construction of the secondary tertiary and service connections within the development in accordance with the District’s Standards.

Section 2.5 – Water Supply The District’s water supply is expected to continue to be the Sacramento Valley Aquifer. Future supplies will come from additional wells drilled into the aquifer.

The District may consider annexing and purchasing additional properties outside of the current District boundaries for the sole purpose of obtaining future well sites within the Sacramento Valley Aquifer.

Section 2.6 – Sale of Unassigned Service Connections The District will continue to sell unassigned service connections or water access rights on a first-come, first-served basis to owners of property within the District.

Section 2.7 – Service Connections A service connection shall not be used to supply any adjoining property, or property across a street, alley or easement. Service from a customer’s meter line to other properties shall be prohibited and shall be grounds for termination of service.

A property owner in the District may establish a meter connection and purchase District water, pursuant to Article 3, for purposes of serving a non-residential use on the owner’s property provided the owner maintains an unused service connection or purchases an unassigned service connection from the District, if available. Each service connection assigned to a meter shall permit annual District water usage totaling 73,050 gallons maximum in any calendar year.

Article 3 – Financial

Section 3.1 – Fees, Credits & Charges To provide service to each lot in the District various fees, charges, and assessments may be imposed.

A. Water access rights may be traded, sold, see Section 2.2.

B. Development fees to fund oversizing may be required, see Sections 2.1 and 2.3.

C. Assessments, as authorized in accordance with the Arizona Revised Statutes, may be enacted for necessary improvements.

D. Property levies have been historically used for the operations and maintenance of the district. It is the intention of the Board to minimize the use of direct O & M levies relying more and more on the sale of water to finance such operations.

Section 3.2 – Purchase of Water

A. Water rates will be established by the Board and periodically adjusted to account for increases in cost to provide potable water to the various zones, areas, and standpipes throughout the District.

Residential/Commercial Monthly Rates

Meter:

$15.00 per month fixed

1 – 6099 gallons = $7.00 per 1,000 gallons

6,100 or greater gallons = $10.00 per 1,000 gallons

Per Section 2.2, 1 service connection provides 200 gallons per day or approximately 6,099 gallons per month. Customers holding more than 1 service connection for the parcel connected to the District’s water system will be billed at the 1 – 6099 gallons tier rate if their monthly water usage is less than 6,100 gallons multiplied by number of service connections.

In-District Standpipe:

$6.00 per 1,000 gallons

Out-of-District Standpipe:

$10.00 per 1,000 gallons

B. Meter Connection In order to obtain service through a connection, there are expenses that must be paid to the District. A Meter and Service Connection Fee in the amount of $1,500.00 It is nonrefundable. A non-interest bearing Water Deposit is a deposit to ensure payment of all fees and charges. It is refundable when the service is disconnected, and if all fees and charges are paid in full. If the customer has established “Good Credit”, then the customer’s Water Deposit will be refunded at the end of 12 months of usage and applied to the customer’s account as a credit. If “Good Credit” is not established, refunds will be held for an additional twelve (12) months and subsequently reevaluated. There may be additional expenses associated if the meter connection involves more than a standard install which includes, but are not limited to, road cuts, waterline location and any other expenses determined by Mohave County staff. These additional expenses are the responsibility of the property owner and must be paid to the District. All fees, deposits and additional expenses are to be paid in full to the District prior to installation of meter connection.

Meter and Service Connection	$1500.00
Water Service Account Deposit	$100.00

C. Meter & Standpipe Monthly Billing, Payment and Non-Payment

1. Customers must complete an application, provide a copy of identification, and show proof of ownership or lease agreement to establish a water service account. There will be a $25.00 new account set up fee applied to all new accounts.

2. Customers will be billed on a monthly basis for water used. Payment in full is due by the second Monday of each month. If payment is not received by the due date, then a onetime 5% penalty on the total amount due as billed will be imposed the following day.

3. If a check payment, online payment or phone payment is returned for any reason there will be a returned item fee of $25.00 applied to the account and the customer may be required to make future payments with cash or money order until “Good Credit” is established. If, due to failure of Postal Services, no bill is received, the customer of record is not exempt from payment or any fees incurred due to non-payment.

4. Payments can be made in drop boxes located at the District Operations office or in Kingman at the District Administrative office. Payments in the drop boxes after 7:00 a.m. will be credited on the next business day.

5. All customers can request the account be placed on vacation status once in a twelve (12) month period. Meters will be locked and the account will not be billed while in vacation status. There is a two (2) month or sixty (60) day minimum for vacation status requests. There is a $5.00 reconnection fee applied to the account once the water is reconnected after the minimum time. If the customer requests the reconnection prior to the minimum time a $10.00 fee will be applied to the account. Customers will be billed for partial months.

6. Failure to pay a water bill will result in discontinuation of service. A fee of $25.00 will be imposed to all accounts that are scheduled for disconnect due to non-payment. To reactivate service during non-business hours, the customer will pay an additional $25.00. Non-business hours are after 5:00 p.m. on weekdays, Saturday, Sunday and County holidays.

7. The Customer of Record will be charged $15.00 if zip tie lock is removed from the water meter or $45.00 if a hard lock is removed from the water meter. If the angle stop is broken during the removal of the lock, the Customer of Record will be charged $89.00 for repairs. In the event of a removed lock when the account has not been brought current, the meter will be removed and the Customer of Record will be charged $61.00. When the account has been brought current, the meter will be re-installed at a cost of $61.00. If an instrument, apparatus or device is installed to obtain service without paying the full charge, the District will file a report of “Theft of Service” with the Sheriff’s Office and service will be disconnected at the water main at a cost of $576.00 to the Customer of Record.

8. If a customer requests a meter test, the District will conduct a free field test. If the customer is not satisfied, the meter will be removed and tested by the City of Kingman. The customer will be charged $50.00 only if the City of Kingman test results verify the meter functionally complies with industry standards.

9. Theft of Service: If a meter is found to have been used without knowledge of the District, it will be considered Theft of Service as defined in ARS 13-1802-A-6. The District reserves the right to prosecute on all Theft of Service violations. If a customer determines there has been a theft of water they may provide to the District an official reported document of such theft of water from the Mohave County Sheriff Department and an adjustment may be applied to the account based on the requirements listed in Section 3.2 K and the adjustment will not exceed 25% of the water usage for the claimed single month water bill (one period of use) and the customer is responsible for the remaining 75%. The District has the right to deny granting a theft of water adjustment.

D. District Payment Plans

1. The District will offer Budget Billing to any customer that “Good Credit” with the District. The monthly billing amount under a Budget Billing payment plan will be based on an average of the past 12-months usage, and any outstanding balance attributed to lesser or greater water usage at the end of the customer’s 12-month Budget Billing plan period will be reconciled through a District credit to the customer or customer payment to the District.

2. The District will offer an Installment Plan to any customer that has “Good Credit” with the District. Installment Plans are limited to one (1) time in a twenty-four (24) month period and for balances exceeding $100.00. The maximum installment plan payment arrangement shall not exceed twelve (12) months. Installment plans will assist customers who are not able to pay an unexpected increase in the billed amount.

3. The District will offer a Payment Extension to any customer that has “Good Credit” with the District. Payment Extensions are limited to one (1) in a 12 month period. Payment Extensions allow a customer to carry the balance due for water usage and tax to the next billing cycle. Payment Extensions exclude all fees and deposits.

E. Fees All fees established in the GVID #1 Policy and Procedures Memorandum are non-refundable.

F. Reinstatement of Deposit If the Customer of Record does not have a deposit on file with the District, then the customer will be required to reestablish a Water Deposit of $100.00 if they incur a disconnect for non-payment. The Water Deposit will be refunded to the account as a credit after twelve consecutive months of “Good Credit”.

G. Standpipes The District’s standpipes are computer operated and require an Access ID and Pin to access. A non-interest-bearing deposit of $100.00 will be imposed to ensure proper payment of bills. If the customer has established “Good Credit”, then the customer’s Water Deposit will be refunded at the end of 12 months of usage and applied to the customer’s account as a credit.

H. Water Haulers Water Haulers will be accommodated at the commercial standpipes which are also computer operated. Access ID and Pin can be obtained at the District office after a deposit of $1,000 is paid which will be held until service is disconnected, and if all fees and charges are paid in full. Billing will be monthly and will be subject to the same regulations as set forth in Section 3.2 A and 3.2 C.

Water Haulers will be required to have the capability to dispense water through a metering device so their customers can determine the amount of water delivered. Proof of compliance with Health regulations dealing with the transportation of potable water will also be required.

The District will establish additional rules from time to time governing the number of haulers and the rates charged those haulers for water delivered inside and outside the District.

I. Hydrant Meter Commercial businesses and companies requesting a “Hydrant Meter” will be required to pay a deposit of $5000.00 which will be held until both the hydrant meter and wrench are returned. The deposit will be returned with no interest at the end of service. Billing will be monthly and will be subject to the same regulations as set forth in Section 3.2 A and 3.2 C.

J. Good Credit “Good Credit” is defined as a Customer of Record that has satisfied all of the following conditions: (1.) Twelve (12) continuous months of service (2.) no more than two (2) delinquent notices, (3.) no disconnects for non-payment and (4.) no more than one (1) check that has been returned for “Non-Sufficient Funds” within a 12-month period.

K. Water Leak Adjustment If high use results from a leak, an adjustment may be granted on water consumption only. A water leak is defined as “unintentional water loss caused by broken, damaged, and/or malfunctioning plumbing fixtures, pipes, or irrigation equipment at a residence.” It is the customer’s responsibility to properly maintain their private plumbing system, including any connected irrigation sprinkler system. A leak in the customer’s private system is the sole responsibility of the customer.

Residential meter customers seeking a water leak adjustment must contact the District and satisfy the following requirements:

1. Commercial properties do not qualify for water leak adjustment.

2. Standpipe customers do not qualify for water leak adjustment.

3. Only one (1) leak adjustment to a single month water bill may be granted every 24 months.

4. Accounts must be active and have established one (1) continuous year billing history.

5. Water use must exceed three (3) times the account’s normal consumption. This is based on the average monthly use from the previous year’s equivalent month and two months immediately before and after the equivalent month.

The District will bear up to 25% of the water usage for the claimed single month water bill (one period of use), and the customer is responsible for the remaining 75%. The adjustment will be reflected as a credit on the next monthly bill. The District has the right to deny granting a water leak adjustment.

L. Business Entities as Authorized Customer of Record Business entities in good standing may provide the following security to the satisfaction of the District in lieu of cash deposits prescribed in this section:

1. An Irrevocable Letter of Credit for the required amount from a local bank. This is where a banking center agrees to extend credit to an applicant for a specified amount. The District will hold this document in lieu of a cash security deposit to protect the District from unpaid water bills. This letter can only be modified by the beneficiary (the District).

2. A Utility Bond for the required amount. This is a surety bond, which is issued to guarantee the payment of water bills to the District in the case of nonpayment by a business entity in which services have been discontinued. This bond is under the classification of a financial guarantee and is required by a private oblige (the District). Some companies that issue bonds may charge the bond applicant an annual fee.

3. A Certificate of Deposit (CD) for the required amount. The CD has to be written in the name of business entity applying for service and the District. A signer for the business entity must sign the CD when applying for service and surrender the original CD to the District, which will then be held by the District until services are discontinued and the final bill paid in full. This CD should be from a local bank in case the District has to use this CD to obtain payment for any unpaid balances subsequent to service disconnection.

The minimum required amount for the security shall equal two (2) times the average monthly usage within the last twelve (12) months for the account or two (2) times estimated usage if twelve (12) months billing history is unavailable. The security shall remain in continuous force for the same duration as required of cash deposits prescribed in this section. The security may support multiple District accounts held by the same business entity.

Article 4 – Construction & Maintenance

Section 4.1 – Maintenance Responsibilities Responsibilities will be shared between the District and the individual. The District shall be responsible for the maintenance of the wells, pumps, storage and pressure tanks, standpipes, primary, secondary and tertiary water lines. The individual shall be responsible for the service tap, service connection, meter housing, yoke & meter as well as their own service line.

Section 4.2 – Construction Standards The District will adopt standards for all of the construction, maintenance material, equipment and techniques needed in the operation or the water system. The Director of Public Works of Mohave County will develop such standards and present to the Board for adoption. It is expected these standards will be amended from time to time.

Section 4.3 – Road Cuts Anyone wishing to excavate on the public right-of-way to construct or maintain a water line shall apply for the necessary permit at the District Engineer’s office where the appropriate permit can be acquired and bond posted.

The permittee shall be responsible for notification of all pertinent utilities in accordance with the Arizona Revised Statutes.

Section 4.4 – As Built Drawings Each individual or developer who constructs a water line shall be responsible for filing as built drawings, prepared by an engineer registered in the State of Arizona, with the District. These record drawings shall be filed prior to receiving the Districts final approval.

Section 4.5 – Fire Hydrants The District shall require fire hydrants be constructed as part of every development within the District. The fire hydrants shall meet and be constructed in accordance with the applicable County Standard.

Section 4.6 – Backflow There are areas inside the District that may have minimal pressure. It may be a requirement to install a backflow device in order to establish a service connection to avoid any risk of contamination. It will be the property owner’s responsibility to arrange for the backflow device purchase and installation to District Satisfaction. Any expenses associated with backflow device will be the responsibility of the property owner. Annual backflow inspections will be required and will be the expense of the property owner.

Section 4.7 - Water Meter Access County staff shall have access to water meters at all times. If a meter is not accessible the home owner will be notified by mail and be required to remedy the issue at the property owner’s expense.

Article 5 – Operation

Section 5.1 Employees of the District shall be considered employees of Mohave County and shall be entitled to all rights, privileges, rules and regulations thereof.

Section 5.2 The property acquired by the District shall be considered the private property of the District and shall be maintained and operated accordingly.

The property may be secured and access in non-business hours may be prohibited. When necessary, trespassers may be prosecuted.

Section 5.3 – Hours of Operation The District Administrative Office shall be open five days a week during the hours of 8:00 a.m. to 5:00 p.m., except Saturday, Sunday, and County holidays. The District Operations office shall be open five days a week during the hours of 7:00 a.m. to 3:30 p.m., except Saturday, Sunday, and County holidays. An emergency number will be provided on a 24-hour a day, 7-day a week basis. Office hours may be modified after appropriate notification of the District’s customers.

Section 5.4 – Private Wells It shall be the policy of the Board of Directors to oppose the construction of any private well in the District. Wells existing prior to the construction of the water system in 1991 may continue but shall not be allowed to be connected to the District’s system.