Board Nails Down Fund Source Questions

This meeting was conducted via Zoom.

President Wade Cornelius called the meeting to order at 6:10 p.m. Attending were board members Patrick Stafford, Secretary Beth Morgan, and Marty Howell, engineer, with Souder, Miller, and Associates. Cornelius noted that the meeting was being recorded.

As the meeting was primarily to meet with Howell, the president launched into the proceedings by stating that his recent communications with Howell had left him with a sense of urgency that we need to keep moving forward with plans for improvements for which we have been awarded funding. Howell said that he has heard that if the association did not have the funds encumbered through a contract with either his firm or a contractor around January first, the governor may be inclined to take it back to balance the state’s budget. [Things were considerably different at this time last year, as Americans were unaware of the coming coronavirus pandemic, which has put the economic thumbscrews to a wide range of endeavors, especially state governments, who had to scramble to find ways to protect their citizens.]

Howell noted that we have two grants, the Capital Outlay funds of $323,000, and the Colonias Infrastructure Funds of $700,000-plus. He said he didn’t think it would be taken away immediately, but as of January, “it’s a ticking time bomb.” He said it would be in our best interests to have money “spoken for,” with either his firm or a contractor, as it would give us protection against having the funds taken from us.

He inquired whether we had gotten a letter from an outside attorney who will set a schedule with a draft grant agreement and a draft resolution to approve the grant, the purpose of which is in essence, a closing on a loan. When board members answered in the negative, he surmised that it was because the association’s request to add a 10 percent match to the loan portion of the Colonias Infrastructure grant is on the schedule for the New Mexico Finance Administration’s (NMFA) Nov. 19 meeting. They probably want to wait until after that meeting takes place and the request is either granted or denied.

At that point, NMFA’s Angela Quintana will have an outside attorney prepare these documents with about seven “datements” set out for various tasks to take place, Howell said. We must have our attorney, Josh Smith, review the documents, and we then need to schedule a board meeting to pass the loan resolution and complete the other attorney’s checklist, at which time, that will render the funds eligible to be spent. Until then, he said, we don’t have access to it, because we have not closed on it.

He continued that, with Morgan’s return of a signature card the previous day, he thought we were finished with the Capital Outlay paperwork. He seemed to think that that was the end of what we have to do but the need to continue to move forward on that is still important. He indicated that Ms. Quintana had suggested that staff would probably recommend approval of our request to get another 10 percent loan to serve as the match for our Colonias grant. She had been urging speed in making a decision about it, but when Howell told her that we had a board meeting a day after he had spoken to her, she relented. He was under the impression that she had thought we were going to drag it out another couple of weeks. He also had tried to get our 10 percent match issue on the agenda for the October meeting, but she said it was too late, so it was put on the agenda for its November meeting.

At this point, the president put a document on the Zoom meeting screen to review, which shows costs of various configurations of our project’s goals and related costs. He had placed questions needing answers on the right side of the document. Howell indicated that, based on the Preliminary Engineering Report (PER), Souder, Miller, and Associates had estimated costs for water line replacement (alternative D2) at $280,000 for the contractor and $144,000 in non-construction costs, totaling somewhat more than $424,000. Alternative P1, Booster station rehabilitation, had been expected to cost around $90,000 for the contractor and $96,000 for non-construction costs, totaling upwards of $186,000.

He had given us estimates that were considerably higher last month. He explained that one of the costs had been counted twice, which accounted for part of the difference in the estimates. Last month’s estimate also suggested we would need 1,800 more feet of water line more than in the original estimate, more air valves, and the treatment of pipe going under culverts costs somewhat more. These items brought the revised costs to $383,664 for the contractor, and about $149,000 for non-construction costs.

Booster rehab (P1) estimates changed as follows: construction costs went up from the original $90,000 (laid out in the Preliminary Engineering Report) to $179,000 in the revised estimates. The reason for this is that he included monitoring, administration, and legal fees. The cost the PER had identified about $96,000 for non-construction costs. Howell’s estimates from last month were $170,000 and $149,000, based on four months for construction. He doesn’t think it will take that long, and the booster station is built elsewhere, put on a skid, and sent to us to install. It can take a few months to build, but when that happens, he simply takes the project off the clock until the equipment arrives, and then restarts the clock. The revised figures for the booster station, at upwards of $179,000 for construction and $99,000 for non-construction, include more than was originally identified to be done within the booster station. The board is interested in a monitoring panel that alerts us if one leg of the three-phase electrical system goes out; the water line from the well-house to the street was added; lightning protection is included, and new electric controls for the well. The estimate just about doubled. This is in part based on what Howell thought we could get from the Capital Outlay program. He also noted that we will probably save money because it probably won’t take as long as estimated. If we are able to begin all of the work at the same time, we may save some there as well. Together, the water lines and the booster station work, in the revised estimate, end up at $515,299 for construction and $148,728 for non-construction, for a total of $664,027.

Howell said that it could work out that the Vista del Rey and the High Valley Farms projects take place simultaneously, and possibly, could be built by the same construction company. If that were the case, the contractor could be required to build the interconnection prior to the construction of the booster station. What that would mean is that, if it were necessary to have water from a source other than our well during construction, we could get it from High Valley Farms, Howell said.

He said that if all goes as planned, the portion of the funding from the Colonias Infrastructure Fund could be reduced to about $341,000. So, the amount of the loan portion would go down, so that we don’t have to pay back as much.

We had indicated to Howell that we wanted new controls for the well, and that we do not feel it is important to do additional work on the well. Cornelius said that we are pretty much agreed about that. He, however, was concerned about the rehabilitation of the tank. Howell said he didn’t think it was necessary to rehabilitate it now. He said if the target isn’t working, that might need replacing. The system currently does not have one. However, Stafford said we need to be able to tell from the outside that we’re about to run out of water. Morgan said Water Operator Henry Torres had an extra monitor that he said we could have. We just need to make sure that it gets installed. We can add small items to the bid after the fact. Howell said these few things we do not want to add before the project goes to Steven Deal for review, because he has 30 days to look at it, and it could delay it going to bid. Howell also noted that if the sensor was something we could just drop in, it would be desirable to avoid having to have someone go into the tank, which raises the costs and extends time required to do it. To add some type of sensor would cost around $3,000, according to Howell. Another way of determining how much water is in the tank is a pressure gauge. He said we might be able to use one that comes in feet. Stafford said what we need is an indicator that we can see from a distance that shows how much water is left. Howell said we could ask the contractor once he is on board if such a thing has to be welded. Cornelius then asked Howell if we could get the sensors out of the funds available and get the contractor to throw in installing them for us was a possibility. It will require a change order to be added after it has gone to bid, but Howell did not see that as a difficulty.

Morgan then inquired if her figures were right: she added in the estimated cost of replacing the well controls and came up with approximately $714,000. The entire project was expected to cost about $770,000. She noted that they would still save a bit on the total project cost. Howell pointed out that the association has something like $1.1 million available, but it will not need all of it, and the first phase of the work is being done with Capital Outlay funds that do not have to paid back. She speculated that the association would end up saving something like $400,000 of that sum, which means, Howell added, that instead of paying back $140,000, it will be more like $80,000 the association will owe. Morgan said, “I like that better,” that amount to be paid back over 20 years, at about $4,000 per year.

Howell said he thought construction would take four months. He said if we got a green light from the attorneys right away and could go to bid Jan. 1, it would take until about the third week of February before contractors can begin work. The president then inquired if we might be able to finagle getting a couple of loads of gravel to “preserve the integrity of the road,” as the road will undoubtedly be disturbed during construction. Howell offered to get an estimate on what that might cost us—as Stafford recommended, between Vista del Rey and the mailboxes—so that we could decide if it was in our best interests to do the roadwork at the same time. Howell sent an email to request that information, prior to the association moving on to the next topic.

The president said the agenda jumped to No. 8, pointing out that the numbers between 4 (open forum) and 8 (adjournment) were missing. Morgan noted (joking) that her editor (Cornelius) was supposed to catch such errors. The president said he was interested in knowing what the numbers would be on replacing the well controls and putting in some base course. He said he thought our topics had been covered, so adjournment was in order. He vowed to send the recording to the secretary, who said she still needed the recording for the October 7 meeting, as well. He adjourned the meeting at 7:08 p.m.