August 5 Meeting Furthers Improvement Plans

President Wade Cornelius called the quarterly meeting of the board to order at 6:04 p.m. Introduction of guests was dispensed with as only board members and association member Claire Baumgartner were present. Board members include Cornelius, Rob Campion, Patrick Stafford, and Beth Morgan, secretary. Board member Terry Holder did not participate.

The president indicated that, though the secretary’s computer had broken down and she was unable to get it repaired until almost four months later, as businesses were shut down because of the coronavirus pandemic, she had prepared two sets of minutes that had been distributed to the board for approval. Patrick Stafford and the president had seen the minutes. Cornelius asked whether Campion had any questions before he would entertain a motion to accept them. He replied in the negative. Stafford then made a motion to approve the minutes, which was seconded by Campion. The motion passed unanimously. Cornelius mentioned that the minutes are available on our website and on Facebook.

The president said that there had recently been a time when even he could not get into the association’s account at Washington Federal online. Campion, our new treasurer, had not been able to access it either. He and the president will continue working with the bank to resolve the matter. In the treasurer’s report, Campion noted that we had a statement through June 30. He said that everyone is paid up except the Henries, who intermittently get behind, pay up, then get behind again. He said it is time for us to pay the road grader, to a tune of $400. He also wanted to know whether we have finished paying Water Operator Henry Torres for past services. Cornelius said we had paid all the invoices Torres had submitted. He had spoken with Torres and his accountant a month or so previously, who indicated she had taken some of his later documentation and would come up with any amounts still owed.

Campion said that we had a balance of $3,524.28, for the month of June. Electricity was the only expense, at $352.81. The Henries’ payment was all that was outstanding at the end of June. He promised to get statements out to us all via Dropbox when they become available. Also, he said he was able to determine that no one’s water payments had been stolen. Claire Baumgartner is attempting to do a direct deposit to the association account at Washington Federal. So far, that seems to be working, Campion said. While Baumgartner had the floor, she inquired whether we have had any further discussions about bringing in additional road base. The president said no, but it may make sense to wait, as, when our construction on improvements begins, the road will be trenched and we would need to do some repair work at that time. Baumgartner agreed that it makes sense to wait. Morgan noted that it seemed the last time the grader operator had worked out here, he did more than usual, as the road had been smoothed between the Morgan-Sechrist and the former Lucero residence. She indicated that that was helpful, because after extended periods of heavy traffic the road gets pretty bumpy. Stafford said the grader bill may be more like $575, not $400. Currently, we pay the grader mileage for getting here, which is about $140 round trip.

The president asked whether there were any more matters to be discussed with the treasurer, and none being voiced, moved on to the water operator’s report. Morgan indicated that Torres had been notified of the meeting, although somewhat late. Patrick Stafford noted that electrician Mark Parmeter had come out and had installed a control mechanism for a pressure pump. We already had it in stock, and we have another, so we are paying him for his time only. Also, Stafford said, a pressure pump that we had thought needed rebuilding had been rebuilt back in November. There was nothing more on the well house.

The next action item was the consideration of a resolution on acceptance of Capital Outlay funds. The president reminded those present that we had applied for Capital Outlay funds to be distributed by our area representative, Doreen Gallegos. This money is a grant, thus, it does not have to be paid back. This funding, in the amount of $323,000, will be used for improvements to our water system. Stafford wanted to know if we could used Capital Outlay funds as a match for our 10 percent required match for the Colonias Infrastructure grant and 10 percent loan. The short answer is no. [As both the capital outlay funds and the Colonias Infrastructure money come from the same source.] However, Morgan said that the first grant we received ($50,000 for an engineering review) we were allowed to use as a match for our second grant of $87,000-plus for design work. However, we can no longer do that. Morgan said as she understood it, we would use the $323,000 to build a new booster station, and the Colonias Infrastructure Fund award, which was for $770,000-plus, would be used to finish our goals of replacing existing water lines, which were all the improvements we currently have designed (except for an interconnection with High Valley Farms, which Lower Rio Grande Public Water Works Authority will pay to build). As the cost to do both the booster station and water lines was estimated at $770,000, we will not need to use all of the money, she said. However, since we do not have $70,000 to use as a match, Morgan noted that Marty Howell of Souder Miller and Associates had said that instead of the funds being 80 percent grant, 10 percent loan and 10 percent match, we could roll the match into the loan portion so that we would have a 20 percent loan, 80 percent grant. However, the amount that we will have to pay back should be significantly reduced, as we had approximately half the funding we needed from capital outlay monies. Stafford had thought we might have to borrow the matching funds from a commercial lender, which would incur interest rates we might not be able or willing to pay. The fact that we were awarded Capital Outlay money means that the portion of the Colonias Infrastructure Funds that we have to pay back may be as low as about half what we could have expected to pay.

The president then asked whether we simply needed to pass a resolution accepting the Capital Outlay funds. Morgan said yes, in part, but also required is the designation of signers for acceptance of the funds and invoices, and a secondary signer. Morgan was under the impression that Souder-Miller would be doing some of the handling of invoices, for example, to contractors. Stafford suggested that Campion could be tapped for being responsible for the handling of invoices. The board member asked whether we could make the motion to accept the funds, and designate the individual who will be handling invoices and the financial end of the process. Morgan asked for a moment to check the wording in the documents provided by the state, and indicated that we must select an individual ”with the authority to bind the grantee.” She said to her, that means the president, although, she surmised that Souder-Miller would be doing the majority of the financial management on a day-to-day basis.

The president said that made sense. Cornelius noted that, generally, he interfaces with Souder-Miller, and if something more is needed, he brings it to the board. Stafford then made a motion to accept the Capital Outlay funds, and that we designate our president as the official contact person. Morgan said the resolution will probably require the president’s signature and the association’s seal, and a signature from the Environment Department. The president noted that we needed to move forward with the motion. Campion seconded it, and it passed without dissent.

Cornelius then noted that we had another ”pot of money,” the Colonias Infrastructure Fund money, like we had received for design work, and which we had applied for or planned to apply for before we knew about the opportunity to receive Capital Outlay Funds. The next agenda item was to review the Readiness to Proceed items presented to us by the Colonias Infrastructure board and consider a potential resolution for those funds. Morgan indicated that we may not be at the point where a resolution is needed. She said the letter shows that we need to be prepared to complete several items by October 21. At that point, we might be closer to requiring a resolution. The secretary indicated that she had attempted to send this document to board members. However, the president had the original* and said he would attempt to put it up on the screen for all of us to see. He did so, and the document showed that the five items to be dealt with included: submission of a monthly draw-down schedule; verification of our match of $70, 723; approval of plans by NMED; verification that rights-of-way and permits have been obtained, and all contingencies are to be satisfied by Oct. 21.

The majority of these things, Cornelius said, will be handled by Souder-Miller. We do have to commit to pay the 10 percent loan [although the letter was actually referring to the 10 percent match]. Stafford asked again whether we have to borrow the $70,000 from an outside lender for the match money. The loan portion charges no interest and to be paid back over a period of 20 years. As we don’t expect to spend the entire amount, Morgan said, the amount to be paid back will be less than $70,000, but could still add up to $70,000 with loan and match combined.

The president indicated that we will still need to be in touch with Marty Howell. He speculated that as we have more money than we actually need, we might be able to do more than we had originally planned. He said that Howell had said we were blessed to be able to get our application in when we did. These monies (and the Capital Outlay funds) come from oil and gas. Because of the coronavirus pandemic, the state likely will not have nearly so much funding available next year. Cornelius said that in light of that, we should double-check and make sure that, if there is something more we need that they would allow us to use the money for—such as drilling another well, Stafford said, we need to find out. Cornelius said that anything we can take care of now, we should take care of. The money is available now, and the president said that, because we got additional money that we were not expecting, and because they may not want to give us additional money in the future, we should do everything possible now. Morgan noted that we have been told by Josh Smith (and others, the president noted) that, while we may have more money than we actually need, we can only do what we told the funding agency we would do with it. She doesn’t believe that we can add additional items, but that we could eliminate some. Morgan said normally, we would meet again in September [actually, October], but we could meet then or have either another meeting in August to discuss things with Howell to be sure that we have everything in line for the readiness to proceed deadline.

Stafford, the president, and Campion all favored having an additional meeting with Howell; Steven Deal, who reviewed our grant proposal for the Environment Department; and the attorney, if warranted.

Morgan also reminded the board that the attorney had told us that a water system is something that needs continued maintenance—it’s not like once you build it, you’re done—it is an ongoing process. It will not end once we complete this project. As Stafford had mentioned, eventually, we will need a new well. The president feared that since we have received so much money already, we might not get any more. However, in the world of grant-funded projects, associations are more likely to get another grant once they have received a previous one, Morgan said. Campion noted the capital outlay funds and the Colonias Infrastructure Funds are not tied together, but that there would probably be a deadline by which we had to spend the Capital Outlay funds. [There is also a deadline by which the Colonias monies have to be: 1. encumbered, and 2. spent.]

The president noted that Morgan could put the Readiness to Proceed document up for other water association members to see on our Dropbox account that they could access via Facebook or our website, to which she agreed.

The president said that Howell had warned us that even if we were awarded the $700,000-plus, the funds would not be available until probably August, so not to depend on them until that time. However, the president noted that they had become available. Patrick Stafford said that if there was a possibility of us using any of the excess funds to drill a new well, that would be encouraging. Morgan reiterated that she understood that the association could subtract from what they wanted to do, but could not add to it. Cornelius said he understood it that way, as well, but since we had money beyond what we need, the requirements might be different. Campion agreed with that sentiment and Stafford said he remembered Howell saying something about not being able to make additions to one’s projects, once the project was approved and the money awarded.

Baumgartner asked about the Melvins former property, as they had been adamant about being included. There were a couple of issues that the Melvins had: 1. They wanted new, larger lines to their property, and 2. they had two memberships and wanted to ensure that the second membership, on a piece of property that has been sold, would be serviced by the water system. However, Morgan noted that any lines on an individual’s property are his responsibility to replace. Baumgartner also was concerned about the amount of livestock at the former Melvins’ home and the amount of water they are using or need to be using. They have the two memberships and the Melvins have moved on.

Morgan said also, regarding the period of the Colonias money’s loan portion, she remembered hearing that the association was being given forty years to pay it back, not twenty. This is one of the questions to ask at a future meeting. This will determine how much we have to raise the rates to finance the repayment of the loan. The president indicated that he had no problem with having another publicly announced meeting to get this and other questions answered prior to supplying the Colonias Infrastructure Board with the Readiness to Proceed items.

At one time, Ponte had expressed an interest in tying in to our system. Stafford wanted to know where he would tap in, because he thought Ponte would have to cross someone’s property to tie in. [At one time, Souder Miller’s design had extended the line that went up Santana Road, almost to the north of the Morgan-Sechrist property. That was done in error, however, it would have provided a line for Ponte to tie into. Without it, he would have to put in line from his gate area down Santana, in order to tie in, as he had said the area he wanted to water with it was trees near his gate, immediately north of the Morgan-Sechrist property on the east and the former Lucero property on the west.]

Regarding the Melvins’ places use of water, Baumgartner mentioned that the individual who had purchased it had a lot of cattle watering at their headquarters. Morgan noted that Melvin’s former grazing lease reportedly extends from around here to El Paso, but it appears that is now owned by a different rancher—not by the people who bought Melvin’s house and grounds. Baumgartner said there are three times the cows watering there that were there before. While the association does have an obligation to provide water to the individual for whom Melvin had purchased a second membership, and to the original Melvin property, at this time, the individual who bought the 40 acres west of Melvin’s place has not requested services.

The president noted that he wants to have a conversation with Howell of Souder-Miller. Morgan pointed out that, if there were to be more than three members of the board (a quorum) involved, it would have to be announced as an open meeting. The president was in agreement with that. Morgan also reiterated needing to clarify whether the term of the loan was 40 years or 20. We have heard both but have been under the impression the term was 40. Stafford wanted to know whether we could repay the loan with the current fees we are charging. Morgan said she didn’t think so. Stafford had indicated he thought we might only have to pay an additional seven-fifty a month per household. Morgan stated she thought it was more like twice that much, and yes, the association would have to raise the rates, because we must have some money in the bank in case anything goes out while the improvements are being built. It was also her understanding that we did not have to raise the rates until the project is finished and the repayment of the loan is due to begin. [This may not be correct, as the state’s representative for the Colonias funds has already complained that we do not have the wherewithal to repay the loan, something that we must address.]

Morgan indicated that she needed to have a clean copy of the resolution (for the Capital Outlay funds) for the president to sign and for us to provide to the Environment Department, and we need to schedule a meeting with Souder-Miller. The president indicated that the readiness to proceed items would be discussed with Howell and whomever else was interested in participating at this future meeting.

There were no items to discuss under old business or open forum. Morgan asked if we should adjourn. The president indicated it was 6:59 p.m., and that we were adjourned. There was a brief discussion about mail theft in the neighborhood, after adjournment. Stafford said he had seen a small, older model sedan, the drivers of which had turned around in Baumgartner’s driveway with no headlights on, turned back to the east, and started to pull in to Staffords’ driveway. When they saw him, they took off. It appears that no one has indicated that they were missing packages or checks. However, these thefts and suspicious vehicles have been in the neighborhood for a while.