I. President’s Corner

We now have almost a year of experience in meter-based billing. Thanks to BWC Director Fritz Riedel's excellent forecasting, our income has closely matched our budget. We obtained the Green Grant and loan from the EPA through the Maryland Department of the Environment because of the expectation that meter based billing would encourage our members to conserve water. It worked! Our water usage over the winter was in some cases one-half that of the same month in the previous year, reducing utility costs. We told you all along that the results would be a best-guess scenario as far as our rates, and we have passed that test, but we underestimated the effect the meters would have. While our usage dropped, it dropped far more than expected, but what did not drop was the expenses related to the general operation of the Cooperative. We certainly have saved some money in energy costs as a result, but old pipes and old tanks did not stop leaking, and pumps did not stop breaking down. We have a very old backhoe which needs a large investment for tires and general repairs, a tank at the Jorgensen Plant which has started leaking and will need to be replaced, and old analog controls which cost us all at least two outages last year and for which we can no longer buy repair parts. A recent leak repair has been held up due to complexity and costs: 300' of digging and boring to install a new main and abandon the old line. We estimate that single leak repair to cost $5000. We continue to experience leaks in several areas of the system, many in lines which have been in the ground for more than 75 years! Dennis and his team take on not just making repairs, but improving reliability with the goal of making each thing not just repaired but better than it was before. That process makes the system more dependable and reduces downtime, but those necessary repairs and upgrades mean more expenses.

We must increase capital investments this year to take care of these known, needed repairs and upgrades. We continue to work on a long-term capital plan to prioritize the most critical repairs. While we have a line of credit to fall back on in emergencies, our cash reserves sometimes drop to levels which would fail to be sufficient in the long term. We will have to pay higher rates in the coming year to continue to comply with water standards and keep water flowing from our taps whenever we turn them on. As planned, we will make those increases as small as possible which will still allow us to maintain and improve the system, and to make it more dependable for the future, while also being as fair as possible for all our classes of users. Water rates will be under constant review.

Unlike what I expected, given monthly rather than quarterly billing, we have some members (as many as 200 out of 800 members one month!) who do not pay their bills on time. They incur a late penalty, but their lateness or non-payment increases our admin costs exponentially. Please pay when billed, since not doing so costs us higher office and billing expenses. Those expenses increase costs for all of us, so despite the penalties, we are all paying to support people who ignore their bills. It has become obvious that many of those members do not even bother to look at their bills. We have tried many things to encourage members to pay on time, sometimes to no avail, until many do not pay until we (in the past) posted a shutoff notice on their door. Our techs have had to post as many as 50 cutoff notices, wasting most of a valuable day. These attempts take our staff away from critical operations and again raise costs.

We will continue to look for the best solution to this late-pay problem. Those who wait until their water has been cut off not only pay a penalty, but pay a $150 reconnect fee! In some cases, not even that has worked to get members to pay on time. The least expensive alternative would be to simply pay your bill on time. We are currently including brightly colored notices in the bills of those who are late, but many are ignoring them to wait for the notice on their door, despite the disclaimer with their bill which plainly states we cannot afford to continue to do that. Other utilities make multiple attempts to get people to pay their bills as we do, but when those attempts fail, they cut off service, then charge fees accordingly, plus require a large deposit for reconnection to help cover failures to pay in the future. We hope not to go to those measures. We take seriously the necessity of cutting off water to a home and someone having to try to live without water, but it is time for our concerns to take into consideration most of our members who simply pay their bills when presented.

My thanks to Dennis DiBello and his staff. Theirs is a difficult job which sometimes entails being hip-deep in ice cold water to make repairs which are part of that continuing responsibility. Thanks also to the members of the Board of Directors for all their hard work. The loss of Sandy has reduced our Board to the minimum number which will provide a quorum at meetings. Please consider volunteering to join us, especially if you have experience which might help our operation. We can always use someone who has some technical expertise, accounting knowledge, or only a wish to work toward bettering our community. We now have openings for two Directors, so if you have an interest or know someone you would recommend, please call the office at 410-586-8710. Our meetings are monthly on the second Thursday of the month; we hope you can join us, and hope also that you can attend our annual meeting on the second Sunday in September.

I received a flyer in the mail about insurance on my water line from an AARP-affiliated company, which will pay for water system failures beyond the water meter. It has nothing to do with Beaches Water Cooperative; we are responsible for failures up to the meter. However, if you are interested, the web address is www.RepairServicePlans.com.

II. Water System Operations, Maintenance & Improvements

Our water system operation continues with an overall rating of 99% reliability. When you stop and think about it, the water system is there when you want it which means in the middle of the day or the middle of the night. Like any utility today we take it for granted that when we need it, it will be there: Operating 365 day a year, 24 hours a day. We have had outages due to leaks and controls issues but with our installed redundancy, isolation capability and response, those have been minimized locally and in a reasonable time. Budget is always a concern when addressing leaks. Most small leaks cost about $1,000.00 in labor and material. Add the fact that leaks sometime are under asphalt or concrete can raise those costs to 4 or 5 times that price. We stock some repair materials but not everything. Sometimes leaks are left to run until the equipment, labor, and materials can be obtained and mobilized.

In the past we budgeted annually for 5 typical leaks but for the future we are including the costs for replacing water main segments as well. When an area has sustained multiple leaks then instead of patching the line we will replace the segment. As well, we are budgeting for new digital controls at the pump houses to reduce the number of control issue. A temporary solution was identified and installed this last year and is keeping us running. With today's digital and cellular technology we need to move on from these 1988 controls.

Another unanticipated cost is damage to meter pits or meter components. Despite repeated notices that tampering with a utility meter is illegal, we continually come across meters which have been accessed by members or plumbers doing repairs, or by banks in the act of foreclosure. The meter and its components are robust and under warranty, which can be negated by tampering. Each meter pit and components represent an average of $1,000.00 of investment in our community. If the placement is somehow wrong and requires modification to avoid damage, call the office to say so. Running over the lid of the pit endangers the antenna and entails an expense which increases costs for us all. Burying the meter pit under mulch or planting nearby delays finding it in an emergency and during routine maintenance.

If you have any question about the Operation or maintenance of the system please give us a call.

V/R,

Dennis DiBello, Business Manager and Superintendent

III. Financials & New Water Rates

With the pending completion of the water meter installation project, paid for by a Green Grant/loan from MDE, the time has come to set water rates according to usage. We have two main goals in setting the rates, first, to provide stable and adequate funds to provide for our costs of providing water, and second, to encourage reasonable water conservation. The current rate is a flat fee of $110 per quarter, or $36.67 per month plus a $15 per quarter "Bay Restoration Fee". Starting July, 1, we plan a tiered system of rates which start with a base fee of $30 per month for the first 0-1000 gallons, and then ramps up, to encourage conservation at higher usage rates, like:

Thus, a monthly usage of 3011 gallons would result in a water bill of $40.56 ($32.00 + $3.50 + $5.00 + $0.06). Similar rate scales are used by the Calvert County water systems and the Chesapeake Ranch Estates Water Co-op. These rates are based on the projected budget for next year (approximately $419,414) and the water meter readings for July 2016 - May 2017. Fortunately, the months included both low and high use months, so we have a good idea of the how much revenue different schemes should produce.

The "Bay Restoration Fee", i.e. Flush Tax, of $15 per quarter will be apportioned as $5 monthly payments on the monthly water bill.

2016 Annual Water Quality & Consumer Confidence Report

Our drinking water is safe and meets all federal and state requirements for community drinking water. In 2016, there were no water quality violations.

Annual Water Quality Report for the period of January 1 to December 31, 2015

This report is intended to provide you with important information about your drinking water and the efforts made by the water system to provide safe drinking water.

The source of drinking water used by BEACHES WATER CO-OPERATIVE is Ground Water: Nanjemoy and Aquia confined aquifers.

Este informe contiene información muy importante sobre el agua que usted bebe. Tradúzcalo ó hable con alguien que lo entienda bien.

Lead and Copper	Date Sampled	MCLG	Action Level (AL)	90th Percentile	# Sites Over	Units	Violation	Likely Source of Contamination
Copper	12/31/2013	1.3	1.3	0.32	0	ppm	N	Erosion of natural deposits; Leaching from wood preservatives; Corrosion of household plumbing systems
Lead	12/31/2013	0	15	6.6	0	ppm	N	Corrosion of household plumbing systems; Erosion of natural deposits.

Water Quality Test Results

Avg: Regulatory compliance with some MCLs are based on running annual average of monthly samples.

Level 1 Assessment: A Level 1 assessment is a study of the water system to identify potential problems and determine (if possible) why total coliform bacteria have been found in our water system.

Level 2 Assessment: A Level 2 assessment is a very detailed study of the water system to identify potential problems and determine (if possible) why an E. coli MCL violation has occurred and/or why total coliform bacteria have been found in our water system on multiple occasions.

Maximum Contaminant Level (MCL): The highest level of a contaminant that is allowed in drinking water. MCLs are set as close to the MCLGs as feasible using the best available treatment technology.

Maximum Contaminant Level Goal (MCLG): The level of a contaminant in drinking water below which there is no known or expected risk to health. MCLGs allow for a margin of safety.

Maximum residual disinfectant level (MRDL): The highest level of a disinfectant allowed in drinking water. There is convincing evidence that addition of a disinfectant is necessary for control of microbial contaminants.

Maximum residual disinfectant level goal (MRDLG): The level of a drinking water disinfectant below which there is no known or expected risk to health. MRDLGs do not reflect the benefits of the use of disinfectants to control microbial contaminants.

mrem: millirems per year (a measure of radiation absorbed by the body)

na: not applicable.

ppm: milligrams per liter or parts per million - or one ounce in 7,350 gallons of water.

ppb: micrograms per liter or parts per billion - or one ounce in 7,350,000 gallons of water.

Treatment Technique or TT: A required process intended to reduce the level of a contaminant in drinking water.

Disinfectants and Disinfection By-Products	Collection Date	Highest Level Detected	Range of Levels Detected	MCLG	MCL	Units	Violation	Likely Source of Contamination
Chlorine		0.9	0-0.9	MRDLG = 4	MRDL = 4	ppm	N	Water additive used to control microbes.
Haloacetic Acids (HAA5) *		2	1.62-1.2	No goal for the total	60	ppb	N	By-product of drinking water disinfection
Total Trihalomethanes (TTHM)		5	3.34 - 5.03	No goal for the total	80	ppb	N	By-product of drinking water disinfection

Not all sample results may have been used for calculating the Highest Level Detected because some results may be part of an evaluation to determine where compliance sampling should occur in the future

Inorganic Contaminants	Collection Date	Highest Level Detected	Range of Levels Detected	MCLG	MCL	Units	Violation	Likely Source of Contamination
Arsenic - While your drinking water meets EPA standards for arsenic, it does contain low levels of arsenic. EPAs standard balances the current understanding of arsenics possible health effects against the costs of removing arsenic from drinking water. EPA continues to research the health effects of low levels of arsenic, which is a mineral known to cause cancer in humans at high concentrations and is linked to other health effects such as skin damage and circulatory problems.		8	4.2 - 13.3	0	10	ppb	N	Erosion of natural deposits; Runoff from orchards; Runoff from glass and electronics production wastes.
Fluoride	06/11/2014	0.3	0.3 - 0.3	4	4.0	ppm	N	Erosion of natural deposits; Water additive which promotes strong teeth; Discharge from fertilizer and aluminum factories.
Radioactive Contaminants	Collection Date	Highest Level Detected	Range of Levels Detected	MCLG	MCL	Units	Violation	Likely Source of Contamination
Beta/photon emitters	12/19/2012	13.1	13.1 - 13.1	0	50	piC/l	N	Decay of natural and man-made deposits.

Terminology used in this report is what is generally accepted as a means of measurement of the degree of contaminants in the water.

Contaminants include naturally occurring items in the water such as minerals and foreign matter that may or may not be acceptable based on the level detected.

Lead Statement: If present, elevated levels of lead can cause serious health problems, especially for pregnant women and young children. Lead in drinking water is primarily from materials and components associated with service lines and home plumbing. Beaches Water Co-op is responsible for providing high quality drinking water, but cannot control the variety of materials used in plumbing components. When your water has been sitting for several hours, you can minimize the potential for lead exposure by flushing your tap for 30 seconds to 2 minutes before using water for drinking or cooking. If you are concerned about lead in your drinking water, you may wish to have your water tested. Information on lead in drinking water, testing methods, and steps you can take to minimize exposure is available from the EPA Safe Drinking Water Hotline at 1-800-426-4791 or at http://www.epa.gov/safewater/lead.

Some people may be more vulnerable to contaminants in drinking water than the general population. Immuno-compromised persons such as persons with cancer undergoing chemotherapy, persons who have undergone organ transplants, people with HIV/AIDS or other immune system disorders, some elderly, and infants can be particularly at risk from infections. These people should seek advice about drinking water from their health care providers. EPA/Centers for Disease Control (CDC) guidelines on appropriate means to lessen the risk of infection by Cryptosporidium and other microbial contaminants are available from the Safe Water Drinking Hotline (800-426-4791).

  VISA and Mastercard:
We are now accepting VISA and Mastercard payments.   You may come by
 the office to make payment, pay over the phone, via www.beacheswater.com
 or include credit card billing information on your billing statement.