Minutes of the Dec. 13 Special Meeting

Vista del Rey Mutual Domestic Water Consumers’ Association

Minutes of the Special Meeting

6 p.m., December 13, 2017

54 Santana Road

The special meeting was called to order at 6:16 p.m., upon the arrival of board member Rob Campion. Those attending were asked whether they knew each other; they did, thus introductions were not necessary. Attending the meeting were President Wade Cornelius, Secretary Beth Morgan, and board members Campion and Patrick Stafford. Treasurer Jana Melvin was not present. Henry Torres, water system operator, was in attendance, as were Andrea Cecur and Randy Mellor, and Souder, Miller, and Associates’ employee Alfredo Holguin.

The meeting had been called to approve Mrs. Melvin’s final budget for 2018 and to pass and sign a resolution indicating the budget had been accepted. Mrs. Melvin noted that the only figure on the budget that is not final is the starting balance of $4,060. This sum is estimated, as the actual amount will not be available until Dec. 31. Board member Stafford noted that we don’t usually lose ground, but we did take in about $1,000 more than the previous year. That, other members noted, was because we had had a significant repair costing about $6,000, for which a special assessment was required.

The budget document showed that water sales were estimated at $15,300. Salaries were set at $3,000, electricity was estimated at $4,625, parts and supplies at $1,500, repairs and maintenance at $4,500. Mrs. Melvin suggested office expenses would run about $200 and insurance about $1,450. Dues, permits, fees, and licenses should cost about $250, gross receipts taxes $200, and miscellaneous $500, bringing total expenses to $16,225 and leaving an ending balance of $3,135. She set aside an emergency reserve from that amount of $1,440, resulting in a cash balance of $1,695.

Morgan noted that what is needed is a motion to approve the budget Mrs. Melvin provided, a resolution that we are to sign, and a copy of the minutes of this meeting, in which we approve the budget, as soon as she gets them done. Campion moved to approve the budget, and Stafford seconded. Approval of the budget was unanimous, providing, Campion said, we correct the title, which was missing a “t” in the word “water.” Morgan read the resolution adopting the 2018 budget. She then passed the resolution around for signing by all the board members present. She will affix the seal of the association when the minutes are completed.

Randy Mellor brought up the fact that a recent home-buyer in the subdivision had had trouble with his lender approving the loan because water association bylaws do not mention anything about maintaining the road. Morgan had been asked by the Flores family and by Kenneth Henrie for a statement indicating that the water association is responsible for the road when they had refinanced recently. This had been deemed adequate for their lenders. There was nothing in the bylaws about it, because when the association was formed, it did not own the road grader that it now owns, nor was it maintaining the road. When the developer relinquished road maintenance, it was to be turned over to a committee of property owners. That committee did not materialize, thus, the water association assumed the responsibility, making it official by executing a bill of sale for the road grader which was, in essence, donated by the developer. At some future date, when the board has time to revise bylaws, it may include something about road maintenance for the purpose of providing something in writing for the benefit of potential lenders.

Because the newly formed homeowners’ association is not incorporated and takes in no fees, it could not pay anyone for maintaining the road. Morgan explained that when, at some point, the board revises the bylaws of the water association, we and could write something to indicate that the water association maintains the road. She suggested that Mellor tell that to Shane Wohlfort, who had trouble with his lender, USA, in obtaining his loan. Mellor asked if we wanted him to turn in an actual invoice for his work on the road. Morgan said that would be helpful.

The president asked if anyone would have a problem with him using the I-beam to drag his own driveway, when the soil is damp enough to allow. Morgan said she didn’t have any problem with it, as long as we offer the same opportunity to any other association member who might be interested in using it, so that it does not appear an officer of the board is getting “privileged treatment.” Many jokes were made about what a cushy perk this could be for anyone who wants to use the I-beam.

Alfredo Holguin from Souder, Miller, and Associates indicated that he had tried to upload a draft of his PER to Dropbox, but that he was unable to do so. A discussion as to why that might be ensued, resulting in President Cornelius saying he would see that those who had been invited to Dropbox could upload documents. His semester is completed, so he has more free time in the evening, he said.

Holguin said the engineering firm tries to look at five major needs: reliability, source (well), distribution (existing lines), storage capacity, and pressure. They try to identify two options and to determine which one is best. Their recommended options must follow USDA and NMED format. First, they looked at system optimization (no construction). This option does not require much expense, just rehabilitating what you have to ensure that it continues to provide water reliably. The second option looked specifically at reliability, including a back-up power source —something VDRMDWCA board members have mentioned. “You have inclement weather out there, the power goes out, and the system goes down; nobody has any water,” Holguin said. This option includes an auto-dialer. The chlorine system goes out or the pump starts to overheat, the booster pump goes out, the tank fails, the auto-dialer can be set up so that it will dial the water operator or send a text to whomever you like, so that it can be addressed as soon as possible. A new well or interconnecting with High Valley Farms are other possibilities. The High Valley Farms water system’s board has decided to merge with the Lower Rio Grande Water Authority, according to Torres, who is their system operator and secretary of their board. This might prevent interconnection with us, but it might not. USDA favors regionalization, Holguin noted. Morgan said that while interconnection had been casually discussed, no one from High Valley Farms had ever formally contacted the VDRMDWCA board about interconnection, prior to them deciding to merge with LRGWA. Morgan noted that neighbor had spoken to neighbor, but that no individual could speak for the entire board, and as such, the prospect had not been fully pursued.

Morgan suggested that High Valley Farms might have been able to avoid merging with Lower Rio Grande, but that no one had made an effort to make formal contact with us to discuss it board to board. Stafford asked Torres whether Lower Rio Grande would be laying pipe to connect with High Valley Farms. He indicated that it would continue to be a discrete system. Its merger would be primarily financial and legal. Thus, there is potential that we could still interconnect with the neighboring system. Morgan said we need to discuss the possibility sooner rather than later. A $1 million estimate, which would include a system-wide overhaul, Holguin said, including interconnecting with High Valley Farms. That would include two new pumps, working in tandem, but not necessarily at the same time, extending the life of both. Just interconnecting with HVF would cost about $210,000-254,000.

Another possibility was an elevated tank. Initially, that could cost more than just creating a new booster station. The PER, Holguin said, is the basis for a system’s request for additional funding. With the engineer’s recommendation, and considering what a system can realistically take on, in terms of debt, are other considerations regarding what option a governing board should choose.

Holguin has said the Colonias money VDRMDWCA is eligible to apply for is an 80 percent grant with a 10 percent match and a 10 percent loan. In some cases, the funds spent on a PER, even if they were a grant, can be used as a match, and in some cases, they cannot.

Morgan asked Holguin whether we could connect with HVF’s old lines and tank, not in use now, based on something Marty Howell of Souder, Miller, and Associates had once said we might be able to do. Holguin noted that that tank and the lines are probably old and brittle, and connecting to that might be more complicated and less appealing than connecting to HVF’s existing system, in part because it is on private land, does not belong to HVF, and would require an easement. Holguin said the fact that we have recently resleeved our well means that it should be in very good condition. If we could handle the loan component of the grant, we would be eligible for up to $400,000. Replacing the distribution lines with 6-inch pipe is estimated to cost $345,000. If we opt for conducting only the design phase, it could be done for an estimated $424,000.

Stafford noted that a back-up well suggested by Souder, Miller, and Associates had been plotted on Morgan’s property. That was news to Morgan, but Holguin noted they wanted to put it on the map just to show that it needed to be a certain distance away from the existing well. It had been plotted at the back of one of the lots Morgan and Sechrist own that are within the subdivision. Generally, funders wouldn’t favor putting a new well on land outside the system’s properties, because it will usually cost more. However, it does not have to. Morgan noted that she and her husband own property immediately outside the subdivision, and that they would not have the same considerations as someone who has nothing to do with the water system; they are users.

Some VDRMDWCA members may be reluctant to go into debt, Morgan noted. Members have said in the past that they did not want to get involved in any loan program for upgrading the water system. If we are required to take a portion of our funding from the Colonias program as a loan, they may not favor it. Holguin noted that the Colonias program’s interest rate has been 2 percent in the recent past. He has also said that it is possible a portion of the match—either as funds or a loan—might be waived if one applies for a waiver. Holguin also said that if the VDRMDWCA was to be awarded a grant, we would not be obligated to accept it. One can apply for the same funds again at a later date.

Holguin noted that Steven Deal currently has time to review our PER and asked our permission to submit it, even though we haven’t thoroughly reviewed it. The board encouraged him to pass the PER along to Mr. Deal. He also noted that having a PER done and linking with another water system are looked upon favorably by grantors. He said also having an asset management plan or at least looking into it is also favored.

Stafford noted that the figures in Holguin’s draft PER add up to much more than $1 million. That would be all the alternatives added together. Holguin noted that we need to replace our distribution lines with 6-inch pipe. According to the VDRMDWCA system plans, we don’t have any 6-inch lines. They are all 3- and 4-in. line. They are estimated to last 15 to 20 years, but he has seen PVC in the ground 40 to 50 years.

“So, our pump is good, our sleeve is good, our well should be good,” the president said, “‘cuz it’s . . .” “. . . recent,” Holguin finished. Cornelius added that if we were to replace all the distribution lines with 6-inch is approximately $424,000. He said he thinks this should be one of our main priorities.

Rehabilitating the tank is another potential item to consider. That can become expensive, because the tank has to have two inlets/outlets. Holguin noted that we could limit the amount of debt we take on by dealing only with the design portion of the project for the next portion of the work. Holguin wound up his comments by asking if he could go ahead and submit his PER to Steven Deal. The concensus was that he go ahead. Contact information for Lower Rio Grande was requested and both Torres and Holguin noted they could provide it. Holguin noted that the primary user or super user for the Colonias Infrastructure Program—Cornelius—would have to be the one to actually submit our application. Morgan indicated she would like to work with Holguin on the grant application immediately after Christmas.

The president noted that he’d like to pay Torres before Christmas. He indicated that he had invoices for Cornelius. During open forum, Henry Torres gave a report on the system. A representative of the Rural Water Association helped Torres with a line that had recently broken and with a sampling port at the wellhead. Torres noted we have a new pump, and a rehabilitated pressure pump has not yet been used. He and Stafford discussed the need to clean near the well house, because discarded materials seem to encourage rodents burrowing under the walls. Stafford vowed to do some clean up there the weekend following the meeting.

Other than those items previously mentioned, Torres said that the “Bac-T” reports from the well look good. Cornelius said at least we aren’t doing nothing. We have been making some progress. Stafford questioned whether the cost to interconnect could be a shared cost. Morgan said considerations such as those should, minimally be discussed with Lower Rio Grande AND High Valley Farms. Morgan suggested that we will have to have a special meeting, and indicated that we would need to invite HVF. Torres indicated that their next meeting would be the following day. Due to the early date of HVF’s next meeting and the fact that we need to discuss it prior to the grant deadline Jan. 12, Cornelius decided to text Torres a written invitation. The actual date will be announced when we know what it is. Jan. 3 or 10 are possibilities. Ideally, we need to meet during the first week of January, Morgan said.

The secretary vowed to have the resolution delivered to DFA the next day. She realized later that that would not be possible, as it would take longer to complete the minutes. Mellor and Cecur left the meeting while Stafford and Cornelius talked about a neighbor’s gravel, the different colors now available, and what he had ended up with, which was kind of green.