[HollyMutual-Announce] Bad news and good news

[Holly Mutual Water Company]

All:

As many of you have noticed, our water supply for the past two months has been poor at best. Of our two wells, Piedmont has been operating but not Whitehall. But that is not the reason for our problems. By design and measurement, we should have still been able to supply water from the Piedmont Well alone. Thus we kept the 3:00-10:00 am supply schedule. Initially we were running out of water between 6:00-7:00 am, which was concerning. Colorado Water Well (CWW) made numerous trips to check out why this was happening, and early on it was because the Piedmont storage tank was always running dry by that time. That should never have happened because Piedmont should be able to supply water from at least 3:00-8:00 am.

Things only got worse as the weeks went by. We started getting reports that there was no water from 3:00 am on, and if there was it was at low pressure or sporadically on and off. We have continued to pay CWW to check the Piedmont Well. But now the problems became even more sinister - we weren't even emptying its storage tank. The stark truth is that the Piedmont Well was never the problem. CWW has not had to fix anything. The problem is simply us, the shareholders. Apparently there are properties that water on more than the two days they are specifically assigned by the schedule, which is available at:

http://www.hollymutual.com/WateringSchedule.pdf

I am also including a copy of this schedule attached to this email.

I will try to explain what is happening. Our two wells were drilled in the 1980s. Back then the aquifer levels were high enough that each well could pump a maximum of 400 gallons per minute from the ground and distribute it to the neighborhood. Because of system limitations and to balance well usage, we only supply water from one well at a time - they alternate back and forth. Properties on the Holly system generally have 1" taps, which limits irrigation system design to about 25 gallons per minute. Thus Holly Mutual can only supply a maximum of 16 properties at a time. If more try draw water than the system capacity, the pressure drops and most likely NO one will get water.

If you look at the weekly schedule, we schedule 13 or 14 specific properties per night. That gives us very little margin for error. If only a few properties 'cheat' and try to get water on days on which they are not allocated, everyone suffers and no one gets water.

Over time the aquifer levels have dropped. Starting about 25 years ago, each well can now only pump around 100 gallons per minute from the ground, which is a lot less than 400 gallons per minute. Fortunately each well has a storage tank. During the day when we're not supplying water, the wells refill their tanks. During our distribution times, the wells continue trying to fill the tanks, but the tanks are being drained faster than they can be filled. This puts an upper limit on how many gallons we can distribute, when 13-14 properties per night are factored in. If additional properties 'cheat', we will run out of water before 10:00 am, when the distribution is shut down.

CWW and I have done the math over and over for the past two months. It's clear that multiple properties are irrigating outside of the two specific days they are assigned. We have two indicators for this: (1) we run out of water early, and (2) we fail to distribute water when there is still water in the tanks.  I'm asking that everyone check, or have their irrigation companies check, to make sure you are only watering on your two assigned days. Because we can't really increase our distribution capacity, none of our remaining options would be pleasant for anyone.

The good news is that CWW has fixed the Whitehall Well and they have set the timers to provide water from midnight to 10:00 am each morning. If used responsibly, we can each get two days of watering per week, with 10 hours each night. But having two wells will not increase the number of properties that we can supply, because we can only supply from one well at a time. If nothing changes, we could be still stuck where we have been - no one gets water.

I'm sorry that I had to write such an email. I'm sure most of us continue to be diligent in carefully using Holly Water, so that everyone can share it. Certainly that seems to be the case with everyone I've talked to over the past few months. We just need to make sure that everyone does this.

Thanks,

Mark Derbyshire

President, Holly Mutual Water Company

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