What is a mutual water company?

Mutual water companies are not-for-profit corporations owned by shareholders, typically landowners in a designated area. California has more than 1,000 mutual water companies of all sizes in urban, suburban and rural areas. Mutual water companies only deliver water to their shareholders.

Who can be a shareholder?

A mutual water company issues shares to property owners in its service area. Mutual water companies divide the cost of building and maintaining the water supply system through assessments and water rates.

Who governs a mutual water company?

Shareholders elect a Board of Directors to oversee the company according to its bylaws.

Can the Board of Directors for a mutual water company operate without community oversight?

No. Under current law, notice must be provided prior to all board meetings and agendas must be posted in advance. Board directors are elected by shareholders who are members of the community. Shareholders have the right to inspect company records.

What about financial oversight?

Mutual water companies have legal obligations to ensure good financial practices and planning. Each mutual water company must:

• Adopt an annual budget
• Publish an annual report for shareholders
• Conduct annual financial reviews
• Disclose financial records to shareholders
• Set aside reserves for maintenance, emergencies and water quality compliance

Who regulates mutual water companies?

All mutual water companies are regulated under the federal Safe Drinking Water Act. The State Water Resources Control Board and the Division of Drinking Water oversee mutual water companies with 200 or more service connections. Mutual water companies must comply with rules imposed by regional water quality control boards, local agency formation commissions, and air quality management districts, as well as local, state and federal rules and regulations.

Why are Suburban Water Systems, the City of La Habra, and the City of Brea considered primary Shareholders of Cal Domestic?

Originally established to deliver water to wholesale and retail Shareholders, Cal Domestic is more effectively designed to serve our three principal Shareholders – the City of La Habra, the City of Brea and Suburban Water Systems. Since Cal Domestic no longer maintains any retail water facilities, approximately 170 retail Shareholders are serviced through the City of La Habra and Suburban Water Systems. To streamline water service and billing, Cal Domestic is offering to buy back shares from retail customers and move those accounts to the appropriate water provider. Retail customers can CLICK HERE to learn more about their options.