Exhibit 10.35

                       DIRECTORS' COMPENSATION

On December 9, 2004, the Board of Directors approved the following
recommendations of the Executive Compensation and Employee Benefits Committee
regarding compensation for Aqua America's Non-employee Directors:

        Effective January 1, 2005, Non-Employee Director members of the Board of
        Directors will receive an annual retainer fee of $12,500, payable
        quarterly, plus an annual grant of restricted stock with a value of
        $25,000 to be issued on the first of the month following the Annual
        Meeting of Shareholders. The restricted stock vests six months after the
        date of grant. Non-Employee Directors also receive a fee of $1,500 for
        attendance at each meeting of the Board of Directors and a meeting fee
        for attendance at each committee meeting of $1,250 for the Audit
        Committee and $1,000 for other committees. In addition, each committee
        Chairman who is a Non-Employee Director receives an annual retainer fee
        of $5,000 for the Chairmen of the Audit Committee and Corporate
        Governance Committee and $2,500 for the Chairmen of other committees.

All directors are reimbursed for reasonable expenses incurred in connection with
attendance at Board or Committee meetings. Directors who are full-time employees
of Aqua America do not receive a retainer or fees for service on the Board of
Directors or committees of the Board. Directors are eligible to defer part or
all of their fees under Aqua America's Director Deferral Plan. Amounts deferred
accrue interest at the prime interest rate plus 1.0%. Amounts deferred are not
funded.