Special Meeting Minutes, March 29, 2017

(Please note: the jingling noise in the recording’s background was the secretary’s cat playing with her ball.)

President Wade Cornelius opened the meeting at 54 Santana Road at 6:07 p.m. Attending were all board members—except Patrick Stafford—and Water Operator Henry Torres. Claire Baumgartner joined the meeting after it was under way.

The first order of business was approval of minutes from Dec. 5 through Feb. 1 meetings. Cornelius had mentioned that a small error had been corrected, probably in the first set. The minutes were not read aloud. Board members had received them via email. Board member Robert Campion made a motion to approve them, which was seconded by Treasurer Jana Melvin. The motion passed unanimously.

The treasurer’s report came next. Mrs. Melvin noted that the association started the month of January with $2,419. 60 in the bank. It took in $1,650 that month and spent only $431.30, ending the month with $3,638.20. That is the amount with which the association started the month of February, during which expenses were $442.65. That left the association with a balance of $4,320.55, where the association began the month of March. Expenses and a final balance were not yet in for March. Expenses have been low, and everyone has been paying their bills, including a new well user, the Powell family. Mrs. Melvin had told them they would receive their water membership certificate once we had met. The board postponed the signing of the family’s certificate, dating it, and affixing the seal until later in the meeting.

The president noted that we had undergone an inspection by Ernesto Valdez of the New Mexico Environment Department the morning of the meeting, paving the way for Torres’ report. There were several things that had been mentioned as concerns at a previous inspection—a fence around the well property, a ladder for the tank and locking access to it, and removal of an old water tank. All those things had been done, but Valdez told the president and water operator he wants a sampling port at the wellhead, in response to a new law. He also noted, Torres said, that we cannot use the well house for storage and suggested that the association make provision for that in plans for any future construction—there shouldn’t be anything in the well house except for the system. Some of the discussion was difficult to sort out here, as two people were talking at once. However, Torres reported that Valdez is scheduled to retire in August. Torres said he is hoping for a reasonable individual to replace him; Valdez has been fairly easy-going.

Cornelius also mentioned that we had wanted Torres to get a price on valves for flushing the system at both ends. The board had agreed to provide these some time ago. Torres noted he had yet to do that. As the water user at the east end has been cooperative, he flushed that end at Kenneth Henrie’s home, and on the west end, he has been using the valve at the property next to Cornelius. Torres noted that someone had taken boards off the windows of the well house, and he had put them back up to be ready for the inspection. The president said that Stafford and Lucero had taken them down so that Stafford could measure and get prices on some windows. This was another thing the board had agreed to do some time ago, so that Torres would not be overcome by chlorine fumes. Morgan asked whether Stafford and Lucero had considered the cost of adding a turbine, another item they had considered; Cornelius responded that their thinking was that the two new windows would be adequate ventilation. They had obtained a price of approximately $420 for aluminum windows.

Next, Cornelius raised the subject of a letter Mrs. Melvin had received from the State Auditor’s office noting that 2017 contracts for audits for “governmental entities” need to be submitted at a time specified on the agency’s website. Morgan noted that, as a Tier II organization, we do not have to be audited every year, although we probably will have to be once our grant year has been completed. Mrs. Melvin noted that she had already set up the portal via the Auditor’s website, through which we do our reporting, and that we do not have to respond to the letter.

The resolution to accept Souder, Miller, and Associates as our engineering firm was next on the agenda. As we scored them and another firm, Wilson, in January, and presented our scores to Steven Deal of NMED, we were given a green light to proceed. However, Deal noted that we needed to pass a resolution accepting them, prior to beginning negotiations on a price for their services. While it is thought that they probably know how much our grant is for, we need to be assured that they include any gross receipts taxes in the amount we have available. For the sake of new water association member Claire Baumgartner, the president explained that we have a grant to have our system evaluated for deficiencies or needed improvements through a Preliminary Engineering Report, prior to pursuing grants for designing and constructing anything deemed necessary. Resolution 8 stated that Souder, Miller, and Associates was the top-scoring firm that had presented us a proposal, so the association was approving them as engineers for our preliminary engineering report. Board member Rob Campion made a motion to pass the resolution, which was seconded by Morgan, and which passed unanimously. Cornelius said he would join board member Patrick Stafford in the negotiation process. What would happen to any grant money saved in negotiation is unclear. Cornelius stated that when a grant is awarded, he has been advised in other grant fund situations to use all the money.

In response to a question from Baumgartner, Campion explained that we had had a pre-proposal meeting with various engineering firms, in which we explained our needs and to which two companies had responded with proposals. We then had to score the proposals, based on certain criteria laid out by the NM Environment Department. Once our scoring was approved by the Environment Department, we were given a green light to proceed. For that reason, the resolution to accept Souder, Miller, and Associates was among the agenda items for this meeting.

Cornelius had proposed closing the meeting to discuss Henry’s pay, but told Torres he wanted to talk about the insurance for water operators first. Henry noted that the Bernal agency had quoted him a price of $2,500. The price is high, he noted, because he handles chemicals. He had a call in to the Pat Campbell agency as well, but had yet to hear back from them. Morgan asked whether he had had any luck with the Grindell and Romero firm to whom Mark Sechrist had referred him, but he said that the office has been moved, so he has yet to get back with the company. Mrs. Melvin asked whether Torres was covered for his work at High Valley Farms. He is, but he is also on the board. This would normally constitute a conflict of interest, but Torres noted the board had received “permission” for him to serve as water operator and as a board member. Therefore, he is covered by their insurance, because he is on the board. It is not entirely uncommon to have a board member serve two functions—one of them paid—in small water associations.

Mrs. Melvin wanted to know whether we could make him part of our board, to which Morgan noted that we have a five-member board. Mrs. Melvin then asked whether we are tied to that five-member figure, to which Morgan responded that our bylaws specify a five-member board. Torres said he would wait to hear back from Campbell and get back to us.

Asked whether there were any more questions for Torres, Morgan asked what amount of money we had finally decided on for Torres’ pay. He had asked for $10/meter and $100 for sampling per month. Plumbing work he does for $20/hr. Because Board Member Patrick Stafford had objected to what Torres was asking, we had delayed making a decision. In one meeting, Cornelius had mentioned the possibility of paying him $200-220/month, since he does not read our meters. We all pay a flat fee. However, nothing was ever finalized, and Torres did not give us any invoices for several months. When he was preparing to, there was some difficulty with his papers, and much of the information was lost. It has, however, been recovered or recreated, and recognizing that it is not fair to expect Torres to work without being paid, the board has discussed paying him a set amount per month regularly, whether we get an invoice or not.

Cornelius noted that he has now received Torres’ invoices. He asked whether we wanted Torres to be here, to which Melvin and Morgan said that he should stay. The president then enumerated the invoices for which Torres has not been paid, the first being from approximately a year ago, for $431.44. The next one was for April 2016, at $288.23, and the one after that for May, for the same amount. June’s was higher, because there were some repairs, at $402.28. July’s bill was $468.22, due to more repair work; and August’s bill was for $373.63. September and November’s bills were each more than $300, at $391.60 in September, and $330.93 for November. October and December were each $288.23. January’s (2017) invoice was $544.43, and February’s, $288.23 once more, bringing the total to $4,383.65.

Cornelius noted that while we had asked about a reduced fee per meter, since Torres is not currently reading our meters, he had told the president that the price per meter would be the same. Torres noted that the state requires that meters be read, and that, once we have done our Preliminary Engineering Report, we will have to do so. There is a benefit to us, however: checking the meters enables us to monitor where there might be leaks. The president vowed to double-check to see which invoices we have paid and which we have not and then to get on a schedule of regular payment. Morgan made a motion to pay Torres his original request of a total of $170/month ($10/meter) plus gross receipts taxes and $100 for sampling and $20/hr. for repairs, with the back pay being paid out as the association can afford it. Having to pay several months at a time is a hardship for the association, a fact brought up by the treasurer and the secretary. The motion passed unanimously. Torres was understanding about the fact that the association will need time to provide him his back pay. Mrs. Melvin asked how soon he might have the invoice for March, and Torres agreed to provide it within the next few days.

The president then brought up the next agenda item, announcements and trainings. Morgan noted that while she had not been aware of the association’s membership in the NM Rural Water Association until Stafford had brought it up recently, we had received an invitation to the association’s conference. These conferences are one of the venues where trainings are offered, and members get discounts on conference fees. The president expressed an interest in the conference, so the secretary gave him the information on the meeting in Albuquerque beginning April 3 (the following Monday). Morgan noted that while she had not been aware of the NMRWA membership, any member of the board could go. It was to be at Hotel Albuquerque. Cornelius said that he would be in Albuquerque that week and might try to go, although he could not commit. Morgan said she could provide him with the pertinent information. As members, someone from the association could register for $220, rather than the $300 charged non-members.

Morgan also noted there is a Basic Board Duties training on April 27 in Las Cruces, as well as others in Alamogordo, and on June 9, there is one in Las Cruces on rate-setting. To a question from Ms. Baumgartner, Morgan said that the New Mexico Environment Department offers the trainings—as well as requiring us to take them—sometimes teaching them in conjunction with the NMRWA, the American Water Works Association, or the Rural Community Advocacy Corporation. Unfortunately, the RCAC is spread much thinner than it once was, with Olga Morales, who was available to us in the past, now being responsible for all the western states.

Cornelius then reported that he had gotten an answer from the state Taxation and Revenue Department regarding whether we need to pay gross receipts taxes. A question had come up about that around the time the association was applying for the PER grant, and while several attempts had been made to get an answer, they had been unsuccessful. However, he was told that we don’t have to pay it. He indicated that the individual he spoke to was in a hurry, and he would feel more comfortable if he could get her to state that in an email. The water operator has to pay gross receipts taxes on his income, if he is a contractor, Mrs. Melvin noted.

The treasurer then asked whether the water operator received a Form 1099 from High Valley Farms. He was unclear: their bookkeeper does his books and his taxes. VDRMDWCA needs to give him one also. The discussion devolved into a general conversation about water operator insurance. The association does not have a contract with Torres; it has an oral agreement. However, the NMED model contract’s Section 9 specifies that the operator must carry insurance and what type it is. Torres said that he had tried to check with Grindell and Romero, whose office has moved. When he finds them again he will get a quote, along with the one from Pat Campbell.

Next, the president said Patrick Stafford had volunteered to negotiate with Souder, Miller, and Associates on our selection of the firm for our Preliminary Engineering Report. Cornelius said he would like to accompany him in that effort. In talking about it with the secretary, it was agreed that Stafford and the president would handle formal notification of SMA that their firm had been selected, but Morgan would notify Wilson, the other company submitting a proposal, that the association had selected someone else. Morgan added that SMA should be notified right away of their selection, even if the negotiation did not occur immediately. Cornelius adjourned the meeting at 7:10 p.m.

Upon adjournment, Morgan affixed the seal to the Powell membership certificate and to the resolution accepting SMA as engineer for the association’s PER.