Annual Membership Meeting

ANNUAL MEMBERSHIP MEETING

FEBRUARY 20, 2007

The Annual Membership Meeting of Fisher Ferry Water District, Inc. was held February 20, 2007, at 7:00 p.m. at South Park Elementary School on Nailor Road.

Present were twenty eight members and several guests. Board Members present were Travis Vance, Jr., Lewis Decell, William Arnold and Ronnie Richardson; absent Malcolm Dove and Harry Johnson. Staff present: Cheryl Van Norman, Linda Hollingsworth, Jeffrey Chambers, Jacob Ross and Keith Caton.

Travis Vance, Jr., President of the Board, welcomed members and guests and called on William Arnold to open the meeting with prayer.

Mr. Vance called the meeting to order by reading Article VII, Section 4 of the by-laws as proof of quorum, with the Annual Newsletter presented as proof of notice to the members of this meeting.

Mr. Vance stated that it had been a traumatic year for the water district. Years ago we were pumping our own water from wells at the Funches plant. As the system grew and State regulations changed, the water district had to look at other options for water. The membership voted to purchase city water and used city water for a long time. When the present city administration was voted in, we were told they would prefer not to sell us water and they would continue to raise the water rates. At an annual meeting, the members voted to become independent of the city and the board started the process of finding land, talking with engineers, the health department, geologists and other people that could help. Our new water plant located across the street is the most up to date plant in Mississippi in how our water is processed and treated. We are pumping our own water again and still working on getting everything just right. One of the main problems we have is the temperature of the water. It is pumped out of the ground at 104 degrees and has caused problems with the ozone treatment. After talking and researching we added two cooling towers. The cooling towers will help bring the temperature of the water down so it can be treated more efficiently. They are not online right now, but we hope to have them online within the next month. During the past year while we were working on the plant, we had to go back on city water. The city water comes from the west section of the district and our water plant is the east section. This caused problems “sloshing” up the water in the lines, pumping the water back and forth caused debris to form in the waterlines. This is the accumulation of debris over a number of years with the city water and the old Funches plant water. This did cause problems with the quality of the water, however at all times water samples were performed and tested and we stayed in compliance with the Health Department. All of the board live in the water district and use the same water as our customers. The water is soft and that makes a difference.

We have had our engineer working with the Health Department on the water all year and will continue to work on the water. Due to the number of problems we had last year, we sent out a newsletter in June explaining some of the problems we were having with the water. We are working on the color of the water. We will have a discussion and answer any questions you may have about the water later in this meeting.

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During the past year we purchased several large items: office generator, new tractor and new truck .We made repairs on all elevated tanks, to prevent rust. The old

office trailer was torn down. We have a new maintenance shop and are able to store our inventory inside instead of outside. We also added two new cooling towers.

Mr. Vance introduced the board members and stated we had two members absent due to illness. The board receives no compensation for serving on the board. We accept the responsibility and work diligently on providing water at a reasonable cost.

Mr. Vance introduced Leslie Royals, our regional Engineer and Sheila Williams, Engineering Service Manager both from the State Department of Health. Richard George, 5th district supervisor, Bill Lauderdale, who will be running for the 4th district supervisor, both live in the water district. Our office staff: Cheryl Van Norman who has been with us for 18 years and Linda Hollingsworth, 16 years. Our maintenance staff: Jeffrey Chambers, Jacob Ross, and Keith Caton. Also our Auditor: Ken Halford, Engineer: J.B. Rushing and Attorney: Blake Teller.

Mr. Vance presented the 2006 Annual Membership Minutes that was provided to each attending member and asked if the membership would like him to read them. Jim Banes motioned to waive the reading of the 2006 Annual Membership Minutes and accept them as written, Charles Stevens seconded the motion and the membership agreed.

Mr. Vance announced that the Halford Firm had completed the 2006 audit and was available for review. Mr. Vance called on Ken Halford to discuss the audit and financial shape of the water district. Mr. Halford stated that the water district was in excellent shape and that the board and Mrs. Van Norman and Mrs. Hollingsworth do an impeccable job for the district. The 2006 audit received a Clean Opinion, which means after reviewing the internal control and compliance with laws and regulations as relates to the loans, no problems were found. Our revenue has increased about 20% to 920,000.00. We had significant cost increase to $887,000.00 from $775,000.00. The most significant cost decrease was the cost from the City of Vicksburg. Also other increases, utility and interest cost. We spent about $3.6 million dollars in the past two years for the new plant. The loans had low interest rates for 20 years. The district currently has $730,000.00 in reserve, of which $643,000.00 is required by RECD. Mr. Halford stated that the reserve is needed for improvements to the water district. Mr. Halford stated that the district continues to be in a strong financial position and the entire board and staff do a great job. Mr. Halford concluded his review and asked for any questions from the members. Several members had questions that Mr. Halford answered about the new loans and utility cost increase. Mr. Vance thanked Mr. Halford.

Charles Stevens asked about the new generator at the office and what happened to the old generator at Funches plant. Mr. Vance explained that due to the SCADA System that was installed to run the controls and tanks, a generator was necessary to run the office since the main computer for the SCADA is located at the office. The SCADA system alarms when tanks are low or a failure with some item in the system. The old generator is still in use at the Funches plant and is exercised every month. The wells at Funches are exercised monthly just in case we might need them.

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Mr. Vance called on J. B. Rushing to talk about the new water plant. We have had some problems getting our new plant up and running. The main problem we have been having is with color and material in the water. The problem with the material is switching the direction of the flow of the water. We checked on adding phosphate that will help with this problem; however we were not able to add it due to the temperature of the water. A decision was made to add cooling towers and once we get the cooling towers on line, we will be able to add phosphate to our water. The cooling towers will reduce the water temperature by 15 degrees on the hottest day of the year. The temperature is 104 degrees coming out of the plant and after the cooling towers will be 89 degrees. We were hoping to have them online last Friday, but ran into several problems that we are working on. The plant has been running without any serious interruptions for several months. We can treat 500 gpm per each well; we sell about 450 gpm a day so we have plenty of capacity. Our elevated tanks provide us with a good day’s storage of water. The Funches plant has three ground storage tanks: we painted one of the ground storage tanks and plan on painting one this year. We are still deciding what we want to do with the third tank. There are also three wells at Funches and one well has been abandoned and will be closed permanently. We continue to exercise this plant. A survey was made of all dead end lines and all of these lines now have flushing valves on them to help get all the debris out of them. Mr. Rushing opened the floor for questions. Question asked: Will we get water from the City monthly as stated last year: No, we are not going to get water from the City every month as this was contributing to the debris in the water. Question asked about salt content of the water: our water is 200 ppm; while it is high it is not above the limit. Individuals may need to contact their Doctor if they are on low salt diets or kidney dialysis. Sheila Williams with the Health Dept stated that the limit is 250 ppm and while we are high on that scale, we are not outside the limit that would require additional treatment. You might want to look at adding something to your home water faucets. The cooling towers will not affect the salt in the water. Questions asked about the color and odor in the water. Mr. Rushing stated that organics in the water cause the color and the odor in the water. The ozone breaks up the color and oxidizes it. The odor we think is caused by hydrogen sulfide gas in the water. Customers were asked that when they have this problem, please call us and we will flush the lines. Question asked about taking sample on the odor. Sheila Williams stated that you can’t detect hydrogen sulfide gas and it can not be found in water samples. The cooling towers will help with what you are experiencing with the water. The cooling towers will serve multiple purposes in the treatment process: help get the CO2 and the hydrogen sulfide gas out of water and help bring the temperature down. That improves the ozone treatment process. Most of the smell is coming from the hot water. Adding chlorine helps neutralize the hydrogen sulfide in the water. Questions asked about THMS and HAA5s. We are under the limit. However Stage two of the disinfectant byproducts law will start in 2008 and each system will start out taking quarterly samples and depending on your sample results you can go to taking samples once a year if under the limit, if over different measures will be taken, such as notifying customers, taking more samples, etc..,

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After the cooling towers are online and everything is working, we will explore other aspects of the water, such as the softness or slippery water. We can add lime to the water. But we are going to take one step at a time adding additional elements to the plant, due to the fact that we have to see what happens when each new element is added. Mr. Vance answered Mr. Oakes considering the third tank at Funches plant. We are going to do something with that tank. There are several options we are looking into, but it has been addressed and we are going to do something. It may not be this year, but we will take care of it. Mr. Vance turned the agenda over to Lewis Decell.

Mr. Decell presented the timeline for the new treatment plant and brought the membership up to date to where we are now with adding the cooling towers. He stated that we found that heat is a catalyst and can cause a lot of things to happen in the waterline and chemicals to break down. As you have heard numerous times tonight, that cooling the water down will help the quality of water. We are continuing working on the water and will take one step at a time and it may take us several years to complete.

Question asked if we had looked at Reverse Osmosis treatment. We don’t have any bad stuff in our water and we didn’t want to take the little bit of good stuff we had out, so we opted to go with ozone treatment. Question asked about detecting chlorine in the water. You should not be able to smell it, we are sampling and flushing. Our samples have been good. Question asked about boil water notices. When we lose water pressure we issue a boil water notice as required by the Health Dept. and it can not be released until samples are cleared by the Health dept. Thomas Berry asked question about high pressure at his house. He stated that pressure at his house is 135#’s before it goes into his house. There is a pressure regulator on his side on the meter. He does try to maintain it and his hot water heater valve keeps popping off. Sheila Williams stated that 80 lbs. of pressure is good pressure and once you get over about 90 pounds of pressure you can start having problems in the house. You could put an expansion tank on your hot water heater. You really need to get everything working properly at your house. We can check this out and see if we need to put a commercial pressure regulator in. Mr. Vance stated we are working on getting our website on line within this year and will be able to post information, boil water notices, etc,

Mr. Vance stated that the Board of Director’s had approved the 2007 Budget with a water sales figure of $900,000.00. Each member was presented with a copy of the 2007 budget and 2006 budget comparison. Ken Halford motioned to accept the budget, Tom McLane seconded, the membership agreed.

Mr. Vance stated that this will be an unusual year for election of officers to the board. Last year we had two members resign and the board appointed two members. We did not elect the two new appointed members last year, so we will do that this year. Per the bylaws if they are appointed by the board then at the next annual meeting they have to be voted on by the members. So we will vote on four members to be elected this year to the board.

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Mr. Vance stated that the Board of Directors’ terms of his position and Lewis Decell had expired and both are willing to continue to serve if the membership so desires. The other two members are Ronnie Richardson and William Arnold. Mr. Vance opened the

floor for nominations for the first three-year term of Travis Vance. Paul Willingham motioned to open the floor for nominations and nominate Travis Vance, Bill Lauderdale seconded, all agreed. Ken Halford motioned to close nominations and reelect Travis Vance, Jim Banes seconded all agreed.

Mr. Vance opened the floor for nominations for the second three-year term of Lewis Decell. Charles Klimas motioned to open nominations and nominate Lewis Decell, Bart Schreiner seconded, all agreed. Richard Price motioned to close nominations and to reelect Lewis Decell, Ken Halford seconded, all agreed.

Mr. Vance opened the floor for nominations for Ronnie Richardson who was appointed to fill an unexpired term until February 2008. Kenny Raner motioned to open nominations and nominate Ronnie Richardson, Paul Willingham seconded, all agreed. Bill Lauderdale motioned to close nominations and to elect Ronnie Richardson, Ken Halford seconded, all agreed.

Mr. Vance opened the floor for nominations for William Arnold who was appointed to fill an unexpired term until February 2008. Bill Lauderdale motioned to open nominations and nominate William Arnold, Charles Stevens seconded, all agreed. Bart Schreiner motioned to close nominations and to elect William Arnold, Charles Klimas seconded, all agreed.

Mr. Vance called on Ronnie Richardson with the Fisher Ferry Volunteer Fire Department. Mr. Vance thanked the fire department for the great job. Mr. Richardson thanked the district for handling the donations to the fire department. The fire department answered 164 calls last year along with brush fires, car wrecks, etc. and saved about $2 million dollars of property. We have 45 members, 27 active firefighters and 19 state certified. With the additional water wells we were able to get a lower insurance rating of level 8, which is great for a volunteer fire department. We urge you to please be sure to have your house and mailbox numbered so you will be easier to find.

Mr. Vance opened the floor for discussion. Question asked if we have ever discussed adding sewage. Mr. Vance stated we haven’t even discussed this, not sure if it’s a viable issue. Question asked about installing fire hydrants. Mr. Vance stated that we put the fire hydrants in as approved by the Fisher Ferry Volunteer Fire Dept. We have to have a 6” waterline. Mr. Richardson stated that the fire dept. looks at filling in the blank spots