Minutes of the Annual Membership Meeting

Special Meeting and Annual Membership Meeting

The Lord’s Ranch

6 p.m., Jan. 10, 2018

The meeting was called to order by President Wade Cornelius at 6:45 p.m. Guests had been given time to get and eat a plate of food, prior to commencing with the agenda for the meeting.

As a few more individuals than usual attended the meeting, the President requested that those seated around the table introduce themselves. Attending the meeting were Cornelius; Treasurer Jana Melvin; Secretary Beth Morgan; Water Operator Henry Torres; Eddie Flores;

Randy Mellor; Andrea Cecur; Shane Wohlfert; Martha Trego; Larz Oberle of High Valley Farms; Alfredo Holguin of Souder, Miller, and Associates; Mary and David Lucero; and Mark Sechrist.

The president asked Morgan to read the minutes from the previous meeting Dec. 13. She did not have a copy of them with her, but noted that the purpose of that meeting was to approve the budget for 2018, as it must be turned in to the Department of Finance and Administration (DFA) by the end of December. Additionally, having an approved budget is important in the grant application process, which the board had undertaken in early January seeking Colonias Infrastructure Board money, Cornelius noted. As the minutes had previously been distributed to board members for review, Jana Melvin made a motion to approve the minutes, seconded by Morgan, which passed unanimously. Board members Rob Campion and Patrick Stafford were not present, but the board had a quorum, and thus was able to conduct business.

The president then called for the Treasurer’s report. Mrs. Melvin noted that the association began the quarter with $5,861, took in $3,500, spent $3,778, and ended the quarter with a balance of $5,983. Morgan stated that a resolution approving the fourth quarter income and expenditures was needed in order for DFA to approved the 2018 budget. She said she didn’t bring such a resolution, because she was not aware that the information for the quarterly report was ready. David Lucero asked what the purpose of the resolution was, to which Morgan replied that it is a legal document stating that the board had reviewed and approved the information presented. The timing of the budget and quarterly report coming due are problematic, as the information for the quarterly report is usually not available until after the deadline for the budget to be submitted, Morgan noted.

During the Water Operator report, Torres said that another leak has been discovered at the east end of Vista del Rey, near Campions’ and Henries’ places. Other than that, he said, the well is running well and the pump house is good. Asked if he needed help, Torres said that he could take care of the leak with a tractor. He noted the chlorine has been kept to a minimum, so no one should have a problem with an overpowering chlorine odor. That concluded Torres’ report.

Next on the agenda, the Secretary had prepared several resolutions for adoption at the membership meeting. The first of these was the Open Meetings Act resolution. While the board has had an Open Meetings Act resolution in place in the past, it must be renewed by resolution every year, Morgan stated. A resolution is a legal document that indicates the water association is in compliance with the law. She noted that a copy is required for the Colonias Infrastructure Board grant application. She intended, she said, to scan it and provide a copy to its board.

The association’s resolution requires that the board give the public 10 days notice for regular meetings, three for special meetings, and 24 hours notice for emergency meetings. Resolutions are approved by the board and signed by the board members present. Morgan made the motion to approve the resolution, which was seconded by Jana Melvin. It was passed unanimously.

Next on the agenda was the resolution for approval of the financial report for the final quarter of 2017. Earlier, Morgan said she had not prepared such a resolution, when in fact she had. She read it for the benefit of the membership. It stated that the board had accepted the report on the last quarter of 2017 and that the board was submitting it as a requirement for passage of the budget for 2018. It was passed around for the board members’ signatures.

The next resolution to be considered was to get the board’s approval for submitting the application to the Colonias Infrastructure Board in the amount of $87,240 with a 10 percent match from the Local Government Planning Fund, and a 10 percent loan. Morgan said the loan portion would work out to $436 a year for 20 years. She said she felt that the association could potentially afford that amount, but said she could not make the decision for the water association to go into debt. Holguin noted that, even if the association is awarded the grant, it is not required to accept it. This amount of money would be used to design the replacement of the system’s lines, to interconnect with High Valley Farms, if the association agrees to that, and a booster station, Holguin noted. The main reason the line replacement is being considered is that PVC is rated to last about 20 to 25 years and the current lines have been in the ground for almost 40.

Holguin has estimated the construction portion of the project at $500,000. Shane Wohlfert questioned how long a construction bid would be good for, and David Lucero suggested that someone would be making a great deal of money off the project. Holguin noted that those costs are for construction administration and materials, as well as the actual construction. Material costs are generally marked up 15 to 30 percent, which is why bids vary, Holguin said. Lucero asked whether the association could build it themselves. However, Holguin noted that the state probably would not fund a project in which anyone other than a licensed contractor were to build the lines. Wohlfert wanted to know whether the association would have the opportunity to go to bid and select its own contractors. Doing so is required. Morgan noted that this is how the association went about selecting Souder, Miller, and Associates, and to solicit their bid and those of several other engineering firms, the association advertised in local newspapers as required by law.

Lucero speculated that if the association does the design portion of the system and then bids out the construction, members would eventually have to come up with about $58,000. That remains to be seen, depending on the funding source. Jana Melvin questioned why replacement of the water lines was being considered now. Holguin explained that the older the lines are, the more repairs are needed—and Torres has noted that more repairs are being made. High Valley Farms does not keep their system pressurized to the same level as VDRMDWCA. Whether or not the booster system VDR uses would affect their lines would be determined by the type of interconnection the two systems may agree upon. VDRMDWCA’s is pressurized between 30 and 60 psi. Mark Sechrist noted that cost for pvc pipes alone would run about $100,000, and that does not include couplings and what-have-you.

Randy Mellor commented that if the association is going to replace the lines, he would like to be assured that it is done right. Wohlfert noted that Holguin had stated that after a system is built, it is usually guaranteed for one year. He remarked that that is not sufficient, at a cost of $500,000. Holguin said that some of the parts would undoubtedly be guaranteed by the manufacturer for much longer, but the installation would likely be guaranteed for just a year. The engineer does an eleventh-month inspection. Part of the $500,000 is a contingency fund. If that is not used, it is given back to the funding organization, and the amount of any loan the association might receive would be lowered.

Wohlfert wanted to know whether the association would have any say regarding which contractor was selected during the bidding process. Morgan noted that, yes, the association had gone through a similar bid process to select Holguin’s firm, and that the association would do the same for a contractor to do any construction. The process is the same that any government agency goes through. Lucero noted that any contractor who is aware of our funding award is unlikely to leave any money on the table. Wohlfert noted that if it is an open bid, we should be able to determine who is charging more for materials or for labor. He also wanted to know who would be responsible to reach out and seek bids for the construction process. Morgan said that the association has to advertise in the newspaper. Meetings to review bids are held, and Holguin noted that, as the association’s engineering firm, SMA would help to run such meetings and to review the bids, check their math, and the like.

The president noted that if the association is awarded the grant, we will have a separate meeting to talk about that more exclusively. He called for a motion on the resolution to submit the grant application, which Morgan made, and Mrs. Melvin seconded. Morgan asked the President to sign the resolution, after which she was to sign it. The next resolution was for the president alone to sign, to certify the grant application. Holguin noted that the application was due the Friday following the meeting (January 12), and that he wanted one of his company’s principals to review it a second time prior to submitting it. Morgan was attempting to use the association’s seal on the various resolutions, when a tiny piece of plastic broke off, making it impossible to affix the seal at that time.

Elections were next on the agenda. Morgan’s term as secretary was up, as was Mrs. Melvin’s as treasurer. The treasurer’s position actually had expired a year ago, but as no one came forward to serve in her stead, she agreed to serve another year. David Lucero had said at that time, he would consider serving at the end of that year. Cornelius noted that the association had had elections in 2015, but since no elections had been held for some time before that, we drew numbers out of a hat to determine how long our terms would be, with Mrs. Melvin’s term ending last year. The president nominated Morgan to serve again as secretary, because she was in the midst of assisting the association with the grant application process. Mary Lucero seconded the nomination, and David Lucero made a motion that Morgan be elected by acclamation; it was seconded by Randy Mellor.

Next, the President joked that he was re-nominating Mrs. Melvin to serve as treasurer—again.

Morgan stated that, as Lucero had said last year that he would probably be willing to serve, and because, as a state employee, he is familiar with budget preparation, she nominated him to serve as treasurer. Lucero said that at that time, he had thought he would be retiring by now, but wasn’t able to do so. He asked Mrs. Melvin if she would serve until March, when the legislative session will be over. She asked whether he had a computer and Quick Books, the program she uses. She agreed to serve a few more months, and Lucero noted that he did have computer access and the program she is using to do the books. Morgan said that she remembered Mrs. Melvin saying that she would train whomever took over the position, which she confirmed. The president called for the vote to elect Lucero as treasurer in March, and the vote was unanimous.

The president stated that the meeting was approaching its finish, but that the potential interconnection with High Valley Farms remained to be discussed. This is a measure that is looked upon favorably by funding agencies, and it makes sense, as the High Valley Farms water association users are our neighbors. Their president, Larz Oberle, was present. He said that High Valley Farms had wanted to interconnect, but had not included it on their original Colonias application. They have made a decision to merge with the Lower Rio Grande Water Authority, as they are too small to survive, and they cannot to continue to raise rates on their largely working class water users. Oberle noted that their system has a 30,000-gallon tank, and that we have a 17,000-gallon tank. He said currently, there is no way they could supply us, even in an emergency situation. Lucero said, “We’re not trying to filling tanks. We’re trying to fill a bottle.” During a water crisis, one would not expect that people are going to be irrigating or fulfilling other high-water-use purposes, but merely supplying homes with the minimum requirements to avoid having to haul water. Lucero said he felt confident that our well could supply High Valley in an emergency.

Oberle said that they are willing to interconnect, but Lucero wanted to know if they will actually supply us with water during a crisis. He said they would if they are able. Once they have a new system in place, he said, it would be no problem. Mrs. Melvin said that we would be tying into Lower Rio Grande, not High Valley Farms, as they are merging. Morgan noted that LRGWA has the same issues with grant applications and regionalization as VDRMDWCA; it should be attractive to them as well as to us. Holguin said that while he had not specifically discussed the two water systems’ interconnection, he was willing to bet they would favor tying in. Henry Torres noted that whether with High Valley Farms or with LRGWA, the two systems could still interconnect.

Lucero said that we might be better off merging with LRGWA, although he didn’t think Melvin would favor it. Mrs. Melvin wanted to know whether High Valley Farms got any compensation for their system, to which Oberle said they are simply taking it over. He noted that the state had appropriated 270 acre feet of water rights, as well. Lucero said that we will probably lose some of ours, as the State continues its adjudication process. We will probably only get to keep those for which we can prove beneficial use. The president suggested that we look into merging with LRGWA, because, as Lucero stated, if the association must take out loans to support the system, it becomes more a liability than an asset. Mrs. Melvin suggested that we have a meeting for the sole purpose of discussing this potential, to which the president agreed.

The final item was acquiring an attorney to certify an agreement between the Colonias Infrastructure Board and the association, which is required for the grant, if it is awarded. Morgan had gone to see Joshua Smith to whom she was referred by Holguin. She discussed the certification with him, and the potential need for a memorandum of understanding between the association and High Valley Farms, if the association decides to interconnect. She presented Cornelius with a copy of the fee agreement Smith’s office had emailed her that afternoon for his review. Prior to her visit, Morgan had been told that an hour of Smith’s time would cost $200, plus. However, he did not charge her for the time she spent visiting with him.

Morgan also asked Holguin about whether not having an approved budget for 2018 would hurt our chances for the Colonias Infrastructure Board grant. He said they tend to be lenient about those matters, as different associations use different budget years (calendar or fiscal).

No old business was discussed, nor did anyone bring up any issues during the open forum portion of the meeting. The meeting was adjourned at 7:59 p.m.