NOTES
FROM RWA SYSTEM RESTORATION MEETING
CURRENT BOARD MEMBERS PRESENT
Dianna Andrews, treasurer
Kathleen Galbraith, president/secretary
Mike Rife, at-large
Marla Ulibarri, at-large
FORMER BOARD MEMBERS PRESENT
Tim Andrews
Gene Christiansen
Rosa Martinez
OTHER MEMBERS PRESENT OR REPRESENTED
Patsy and Richard Andre
Dora and Andrew Aragon
Robert Arreguin
William Burden
Margaret Carlson
Gene Christiansen
Sage and Shane Faulkner
Chris Hennigh [Mercedes Martinez]
Bette Kerr
Kathy Larson
Art and Ruby Marquez
Jim Nylund
Will Pape [Sage Faulkner]
Mike Rife
George Rowan
Sandra Vandiver [Madonna Lindley]
Juanita and Robert Watt
MEMBERS REPRESENTED BY IN-ABSENTIA
CONTACT
Jules Appelman
George Cillessen
Stephanie Eberle
Jim Johnson
Laura Johnson
Robert LaBrier
Lucy Maestas [Joey Sanchez]
Bruce Whittett
OVERALL MEMBERSHIP SNAPSHOT
[15] memberships are un-metered [tied to a specific lot
on paper only]
[26] memberships for dwellings occupied year-round
[43] weekenders or seasonal visitors [including lots
that people use for camping only]
[15] memberships with in-ground meters which are never
used
[1] RWA recovered an in-ground metered membership as a
result of a physical system audit
TOTAL MEMBERSHIPS: 99
TOTAL DISTINCT* MEMBERS: 88
*some members have more than one
membership.
For shorthand we will use “1/100th”
to indicate our responsibility as individuals, but the owners of multiple
memberships must extrapolate accordingly.
LAWSUIT
We are currently named in a lawsuit
between two divorced parties. We have asked to be removed from the lawsuit but
the judge has not yet reached a decision. We could force a scheduling hearing
but the judge may get upset with us and decide just make us a party to the suit
anyway. For now we are choosing to await his/her decision with minimal attorney
contact to keep our legal fees down. If we exhaust our insurance-paid defense
fund of $5000 [we are at $3800], we will pay the bills as they accrue but have
to charge back 1/100th of the cost to each owner.
[William
Burden]: When we run out of insurance coverage, will we investigate whether our
fees can be redirected back to the litigants.
RESPONSE: Yes, that is already in our plan.
PHYSICAL INTEGRITY OF SYSTEM
The riverbank upstream from our pump
house is being undercut. A potential result may be that the pump house is
threatened. We will be working with an agency of the Drinking Water Bureau to
investigate the potential damage and devise a mitigation plan.
COST SAVINGS INITIATIVES [annual]
$3,600 a
board member is currently doing the monthly billing free of charge
$12,000 a
board member is relieving the system operator so that he does not have to visit
the pump house daily.
$$ ? An automated remote-report
chlorimeter is being installed [cost $4000].
$$ ? A computer and computer programming
has been donated to enable the remote device above.
$$ ? Billing system [over $1500 one-time
value] has been donated.
$$ ? We have cross-trained board members
to do meter readings so that we can have coverage in the absence of our system
operator.
$$ ? We have locked the system flush
valves and fire hydrants to discourage theft.
$$ ? To increase revenue, about two
years ago we stopped the practice of giving way 8000g per month free of charge,
and began recharging by the gallon for water used. [This
practice carries the added benefit of addressing the perceived inequity between
those who have meters in the ground, and those who do not].
NOTE:
On this and following pages, italic portions of the response have been added
during transcription for further clarification.
OPEN QUESTION PERIOD TO THE FLOOR
[Richard
Andre] Clarify the monthly “adjustment” to offset the cost of the new system.
RESPONSE:
The monthly adjustment is $45 per
account, for the next 36 months, for a total of $1620. Or, you may elect to
choose one of the following two prepayment savings options: a] prepay your
portion by Dec.31: $1350; b] prepay your portion by April 30, 2012: $1500. If
you choose the prepayment route, your account will not reflect the monthly
increase of $45. These monies will be placed into the construction account we
maintain for this purpose; and expended only as we have enough to pay for each
phase of the work.
What
happens to my prepayment if RWA sells a $15,000 membership? [Hypothetical
question]
RESPONSE: When the project is completed, the appropriate portion
of your payment will be refunded.
[Madonna
Lindley] I thought that the membership was capped at 100 because we needed a
new tank. Have we gotten a new tank?
RESPONSE:
[Gene Christiansen] The system was
originally designed to accommodate 100 members….[tape is too faint]. [Galbraith continues] What has changed?
We really have no hope of the system being fully used due to declining
population. The probability of acquiring ten new members who will build and
live here full time is remote, in my opinion. [Our tank
holds between 22,000 and 23,000 gallons. Actual usage figures averaged over the
past 12 months show that 1] Our average daily usage is 4820g, or 23% of the
tank capacity (this average includes catastrophic leaks); and 2] the
highest single month averaged 11,249g, or 50% of capacity, with the highest day
in that month using 18,000g—again, this high usage is due to catastrophic leaks.
During this month the tank did not run dry and the pump kept up with the leak.]
[Gene
Christiansen] What is the money derived from the assessments or sale of new
memberships going to be used for?
RESPONSE
[Dianna Andrews] #1 replace master
meters, flush hydrants, and orphan meters—those not connected to masters. #2 replace
all the rest of the in-ground meters with radio reads, backflow and high risers
so that meter reads can be automated and meter replacement is more accessible.
#3 we must fence the tank, and scrape and repaint it inside and out. [Galbraith] The recent Sanitary Survey
requires that the fence and backflow issues be given a timeline. Also we need
meters at the east-west system junction to locate leaks more rapidly.
[Bob
Watt] Will the fence around the tank leave room for installing an additional
tank in the future?
RESPONSE
[Dianna Andrews] There is not enough
room on top of the hill for an additional tank; it might be nearby, but not
within the new fence.
[Mercedes
Martinez] Have we asked for a bid on exactly what the project will cost?
RESPONSE
We have secured pricing estimates for
the equipment based on the state contract. Our intent is to use Randy Terrazas
as the contractor. Some members have asked why we do not go out to bid on the
contractor. Our thinking is this: 1] there are few contractors in this valley
who do work of this scope on an almost daily basis, 2] Randy is intimately
familiar with our system, having been our system operator for years, 3] many of
us have a prior relationship with Randy in that he has done work for us
personally. I [Galbraith] can think of only one complaint that I have heard
about his work in the 7 years I have lived here, 4] his price per hour is
within state guidelines, he doesn’t pad his hours, he stands behind his work,
5] as volunteers we are extremely reluctant to consider an out-of-the-area
contractor who may come in and low-ball the job, and leave us high and dry. [At this point several attendees contributed positive
comments about Randy].
[ACKNOWLEGMENT
THAT THE FOLLOWING MATERIALS WILL BE SENT TO ALL MEMBERS]:
1. A letter recapping this meeting in
detail
2. A list of the project costs and
timeline
4. A request for input on Los Terrazas as
contractor
5. A statement explaining reimbursement
options in cases of prepaying too much
6. A copy of the Rules and Regulations
and By-laws upon request
7. A plan to consider relief for
low-income members
[George
Rowan] Spoke in support of Randy. Suggested that we solicit comments about his
work from the membership.
RESPONSE
We have not yet offered the job to
Randy. He is aware of it, of course, but we haven’t had private discussions
with him.
[Gene
Christiansen] I am concerned about the elderly folks for whom a $45 per month
increase will be a hardship.
RESPONSE
We don’t quite know how to handle
this. We don’t want to be in the business of assessing someone’s income, or
asking them to prove their case. [Carlson] Offer other payment arrangements and
hope that folks self-monitor.
[Mercedes
Martinez] If we knew about this project two years ago, why didn’t we start
collecting money then instead of just before winter?
RESPONSE Two years ago we still thought that a loan/grant was
the best way to go. We were trying to resurrect a process that had really begun
in the year 2001 and been neglected by the engineering company
[Gannett/Fleming] despite continual prodding by a succession of board members.
By the time recent boards got a grip on the situation it was determined that
the Gannett/Fleming response was not unusual, and that we would be much
better-served if we took it out of their hands and managed and financed the
project ourselves. Two years ago we did not know what direction to recommend.
[Rosa Martinez: Two years ago the members would still have to make payments on
the loan portion and the interest]. [Galbraith: our challenge is to make the
payment period long enough to be do-able, and short enough to get the project
done within the financial estimates]. [Margaret Carlson] Do the estimates
include mitigating the river bank encroachment problem? [Galbraith] No. We are
currently working with an agency of the Drinking Water Board. It may be that we
install gabions, but will have to be in contact with the Army Corps of
Engineers as well.
[Ruby
Marquez] What is the purpose of the backflow valves and how would we be
addressing the problem?
RESPONSE
The requirement for backflow devices
on each member’s meter is to prevent sewage or some other contaminant present
at your connection to flow into the main system. When the system was originally
established, backflow protection was not a requirement, but now it is a New
Mexico Environment Department mandate, and not something that is open to
negotiation.
[Ruby
Marquez] Has the board considered another way to distribute the financial burden
that would be more fair for those with paper memberships, or those who rarely
visit?
RESPONSE
Each member owns 1/100th of
the assets of the association. Some live here full-time and some do not even
have connections, but we own the assets equally and will have to bear the
responsibility for maintenance equally. It is like owning a unit in a condo,
but rarely using it—the owner still has to join with other owners to address
the roof, the paint, the maintenance man. The value of the asset rises and falls
with the market, but to maintain that value, the asset must be kept in working
order. The only differentiation between frequent users and those who are not,
is that users pay for each gallon used, at the same rate, and with no
exceptions. [The requirement for
backflow protection on all meters demonstrates how memberships are
interconnected into one system].
[Mercedes
Martinez] So every member is paying for each gallon they use, and then everyone
is paying for 1/100th of the base charge [monthly system overhead plus tax] as reflected
on the monthly bill?
RESPONSE
Yes. And speaking of the monthly bill,
there are always announcements printed on the back of the monthly
bill—including the announcement about when and where this meeting would take
place, so we encourage members to read it as they make their payments.
[unidentified
questioner] How will the contractor be paid? Is Randy Terrazas going to carry
the note for us for the work?
RESPONSE
The entire project is pay-as-you-go.
We will only ask the contractor to do each portion of the work as it can be
paid for. [Mike Rife: Unlike the federal government, we will only do the work
that we can pay for with today’s money].
[Gene
Christiansen] So, if the restoration project is going to be paid for with the
assessment money, why do you plan to sell 10 additional memberships that will
take us over the line capacity of the system and could cause grief for the
membership down the road?
RESPONSE
First, the study done by the latest
engineering company supports our sale of additional memberships. If we are so
lucky to sell the 10 additional memberships, we would do the construction
quickly and stop the monthly assessments, except for the small continuing
contribution to a reserve account.
[Gene
Christiansen] I still have a grave concern that disregarding the caution that
has existed for more than 20 years, and expanding the system, will tax it
beyond its capacity.
RESPONSE
We understand your concern, and feel
that if and when the system begins to edge toward reaching capacity, monies
from the reserve fund we have established and are contributing to monthly will
need to be tapped. [Also reference italic insert addressing usage following
Madonna Lindley’s question on page 1, column 2.]
[Gene
Christiansen] How will you handle the fact that we may not have sufficient
water rights to cover the additional users?
RESPONSE
We have 23+ acre-feet of water rights
now, and we don’t even begin to approach that usage on an annual basis. If we
get additional members beyond the 100, their membership will be tied to a
specific piece of property for which they furnish the Warranty Deed, and they
will be required to transfer the water rights from that property to us, or make
a further payment of $1750 to cover our purchase of those rights on their
behalf.
[Shane
Faulkner] If the system is already failing as it stands right now—and I can
find a contradictory study for any study you produce—the addition of 10 new
memberships can only make matters worse.
RESPONSE
The problems we are experiencing have
nothing to do with approaching capacity, or operating at capacity. They simply
have to do with the age of the current physical infrastructure on the
distribution side of the system. Taking it a step further, the sale of new
memberships doesn’t really have anything to do with the restoration. If it happens,
it will be frosting on the cake, so-to-speak. But we need to act as though it
will not happen, and be prepared to pay $45 per month for three years.
[Jimmy
Nylund] Wouldn’t the cost of drilling a well be a more cost-effective
alternative for property owners?
RESPONSE
That certainly is an alternative. To
the best of our knowledge the cost might be in the $20k to $30k range, and the
water quality may be iffy, depending upon where you drill. But that is always
an alternative for property owners.
[Jimmy
Nylund] How did you arrive at the figure of $15,000 for new memberhips?
RESPONSE
We have heard through the grapevine
that paper memberships have been sold for $15,000. To forestall that happening
again, to the detriment of the association’s own financial goals, we decided to
adopt that figure.
[William
Burden] Was the figure based on any kind of analysis of the property or
equipment?
RESPONSE No. It was based on the market.
[Gene
Christiansen] So basically this is targeted at people like me who have extra
memberships, and are selling them at a profit?
RESPONSE
No. We are not targeting you. We
simply looked at what we reliably believe is the market value and set the price
at that level. [Mike Rife and also Kathy Larson here make identical statements
that when they each purchased their own home or raw land they were given to
understand that the water membership that went with the purchase was worth
$15,000.]
[Madonna
Lindley] Do you have people lined up waiting to buy these memberships?
RESPONSE No, this may all be pie-in-the-sky, and the sales may
never happen at all.
[Gene
Christiansen] I have in my hand a priority list established by a past board
which contains names of people who have been promised memberships at the what
was then current tie-in rate of $2000?
RESPONSE
We rescinded that priority list
several years ago [in December 2007], at a board meeting which you did not attend, when we determined
that we would likely never open up the system to further development. In
looking over past minutes and correspondence files, we can find no evidence
that the priority list was ever common knowledge amongst all members. [We reserve the right to be proven wrong on this, but because it does not
appear to have been handled in an open manner, with each and every member
having an equal chance to participate, we are choosing to consider it invalid].
If people on that list would now like
to put their name into the drawing for a membership, the price will be $15,000.
[William
Burden] Is there any possibility of selling or leasing [the system’s] water
rights to bring in revenue? And, are our water rights real, or could our
tributaries be over-subscribed?
RESPONSE
[Dianna Andrews] The State Engineer’s
Office tells us that we cannot transfer water rights south of Espanola. In
normal years our usage does not even approach our limit. In drought years we
have not yet run out of water. But if the
[Ruby
Marquez] If you have been paying the $45 per month, and at any point before
April 30, 2012 decide to pay the full amount in order to take advantage of the
pre-payment discount, will you get credit for the $45 payments you have been
making.
RESPONSE
Yes.
[Andy
Aragon] Does that mean if you pay ahead that your meter gets done right away?
RESPONSE
Actually, it does not. We still are
quite clear about system restoration priorities in terms of time-line, and
would accomplish those goals first. We will focus first on what is putting the
system at risk. Additionally, when your meter is replaced, you will show an increased
water usage due to the new equipment, so doing yours first won’t really give
you a financial advantage.
[Art
Marquez] Is this state park [in which this meeting is
being held], part of the Rutheron Water Association? And, what is
meant by “un-metered”?
RESPONSE
No, the State Park is not part of our
system. The term “unmetered” refers to members like Mr. Burden who owns two
lots in Longhorn Estates and has one current membership for each lot, but neither
have been connected to an in-ground meter.
[Mercedes
Martinez] I am concerned that we have known about this for two years but
haven’t yet asked Randy if he’ll have time to do the work.
RESPONSE
[Tim Andrews] Randy knows about the
work in general, but his comment is, basically, let him know when and if it
becomes a reality, and he will then be ready to start planning his time
accordingly.
[Mercedes
Martinez] I am also wondering if we have any idea what he will charge.
RESPONSE
We are pretty familiar with his past
and current price structure for hourly and travel time. We will give him the
scope of each portion of the job and get his estimate at each point. [Dianna Andrews]
There are guidelines that give the standard costs—between $800-$1200 per hole
for this kind of work, and we will compare his cost estimates to these
guidelines and our past experiences with him.
[Gene
Christiansen] Has the “pirated water” issue been resolved?
RESPONSE
Not yet. The board is still looking at the Rules and Regulations and the
By-laws to try and resolve this issue. Since it is not costing us anything at
this time, it is in abeyance until we get these more pressing matters on track.
[Rosa
Martinez] How will the sale of a home or property be handled if the member has
been paying the special assessment?
RESPONSE
Monies already paid by the seller
against the assessment, will be handled between the buyer and seller in escrow.
Monies still to be paid will be assessed against the new owner. We only want to
collect the $1620 maximum per membership by the time 36 months has elapsed, and
will assist both owners in making fair and equitable arrangements.
[Gene
Christiansen] I suggest that RWA notifies the valley realtors of this new
development. [This was done in a
letter to valley realtors dated October 1, 2011]
[Tim
Andrews] What if I have multiple memberships and either cannot afford or choose
not to make the assessment payments on all of them? Can I sell one or more of
them?
RESPONSE
Members cannot sell paper memberships
separate from the lot they were originally tied to. Also, in the case of a
member who has a home or property already plumbed with Rutheron water, s/he cannot
sell the membership separate from the home or property to which it is already
connected. If you do not want your membership, you will have to abandon it and
it will become an orphan membership. The board has already committed to selling
ten fresh memberships. Since every membership is supposed to have been tied to
a specific piece of property in the first place, we would be working at
cross-purposes to our goal if we allowed people to sell off their memberships
privately.[The board simply cannot imagine that the
intent of the founders of the water association was ever to provide a mechanism
for using memberships as a cash cow for individual members and/or developers to
acquire and then scalp them to incoming property owners.]
[Mercedes
Martinez] What happens if all members, or most, exercise their option to pay in
advance? Then we will have a shortfall and be unable to pay for our project.
RESPONSE
[Mike Rife] We did not discuss this
possibility, but have enough money in our bank checking account to make up the
difference. [Galbraith] we have worked hard to build our bank account up with a
combination of savings efforts as well as charging for each gallon of water.
Every member who has experienced a water leak has paid for it, and for that we
are very grateful.
NOTE:
THIS INFORMATIONAL MEETING ENDED AT APPROXIMATELY 11:30 A.M.