August 8, 2023 Minutes

The Board of Directors of the Snake River Water District (SRWD), Summit County, Colorado, met at the district offices at 0050 Oro Grande Road and via online Zoom conference on August 8, 2023, for their regular quarterly meeting. The meeting was called to order by Scott Price at 4:00 p.m. 

Roll Call 

The following members of the Board of Directors were present at the beginning of the meeting, constituting a quorum: William Bergman; Char Bloom; Randy May; Bill Bowerman. Also present: Scott Price - District Administrator; Ron Mentch - Superintendent of Operations; Dan Teodoru - Legal Counsel for the District; Donna Svenson - Financial Manager; Alec Bry - Lead Engineer. After the executive session, Steve Bushkuhl and Scott Thisted joined the meeting. 

Consent Agenda

Mr. Price reviewed the information in the packet regarding the May Board minutes and the three Transaction Detail Reports. President Bergman asked if anyone had questions or comments regarding the minutes. None were forthcoming. Mr. Bergman made a motion to approve all items on the Consent Agenda. Vice-President Bowerman seconded. The motion passed unanimously. 

EPA'S Unregulated Contaminant Test Results

Mr. Teodoru recommended that the Board go to executive session to discuss this topic on the basis of frank discussion of legal matters. Mr. Bergman made a motion to enter executive session. Secretary Bloom seconded. The motion passed unanimously. 

Constituents Interested in Serving SRWD 

When the meeting resumed, Mr. Teodoru stated that Steve Bushkuhl and Scott Thisted should be invited to join the group in the conference room (they were outside waiting). Mr. Price introduced everyone, including those on the Zoom conference. He stated that Mr. Bushkuhl and Mr. Thisted have volunteered to serve on the Board, and that the current Board has 4 members with 3 empty seats. 

Mr. Teodoru reviewed the District's bylaws and the process of nominating appointees to fill vacancies. He stated that the Board has received background information on each person. Mr. Bergman nominated Mr. Thisted. Mr. May made a motion to appoint Mr. Thisted to the Board. Mr. Bowerman seconded. It passed unanimously. Mr. Bowerman nominated Mr. Bushkuhl. Mr. May made a motion to appoint Mr. Thisted to the Board. Ms. Bloom seconded. It passed unanimously. 

Mr. Teodoru stated that the appointees have paperwork to sign and that they cannot vote during this meeting. Mr. Price thanked the new appointees and pointed out that they bring diverse and outstanding skill sets needed by the Board. 

Insurance Discussion

Mr. Price reminded the Board that the District has insurance coverage through the Colorado Special District Association Pool. He stated that Mr. Bergman had requested additional liability to cover the Board members. The District pays $2,300 annually now for $2 million liability coverage. The maximum available from the Pool is $10 million (additional $8 million) for an additional $2,000 annually. Mr. Bergman stated that he 􀀒eels it is in the Directors' best interests to purchase the inexpensive additional coverage. Mr. Teodoru stated that this is an insignificant cost and advisable to move forward. He also stated that the collective work of the Board is completely covered by the Governmental Immunity Act. Mr. May agreed with Mr. Bergman's thoughts, and the large capital projects undertaken by the District support additional coverage. Ms. Bloom made a motion to purchase the total $10 million liability coverage. Mr. Bowerman seconded. It passed unanimously. 

Capital Projects Update

Mr. Price provided a historical discussion of the District's water distribution system, and the problems associated with the aging pipes and components. Mr. Bergman described some of the new projects being completed, and he asked Mr. May to provide a detailed update. The new pump facility was discussed, and it is working well. 

The Schoolmarm tank being offline is required to replace the main transmission line, which contains portions constructed in the 1970s. He stated that the area for our line has the most utilities underground in the resort area. He described the work on the new storage tank in the Base 3 pressure zone. Mr. Thisted asked some questions about the projects and estimated timelines. Mr. Mentch provided information regarding the operations of the new pumping station, the Schoolmarm tank coming back online, and the need for another tank. 

Mr. May commended Mr. Mentch's team for working overtime with additional attention to the controls to prevent pressure issues. He expressed his appreciation for Water Works West exceeding their scope of work to keep the District water operating reliably. Mr. Bushkuhl asked questions regarding the benefits of conducting the project work, and a discussion ensued about the problems with instability of soils, deterioration of materials, and the cost of repairs versus proactive replacement. Mr. May explained the history and current status of the Loveland Pass Village area that once had its own water district and water treatment. He explained the replacement of that failing infrastructure and working with AE2S to engineer the best design for the construction in 2024. Mr. May stated that the surveying and geotechnical work will be challenging. 

Mr. May stated that he has been involved in the Keystone area for nearly seventy years, and the capital improvement work now is more than ever undertaken. Mr. Price and Mr. Bergman commended Mr. May for doing an outstanding job managing the projects. 

Administrator's Discussion Items 

Mr. Price provided a summary of the new billing and customer portal solutions. He described how Ms. Svenson is working through the definitions and policies implemented in the billing process. She discovered that some of the delinquent or shutoff fees have not been updated since the original Rules and Regulations. Mr. Price asked if the Board would approve Ms. Svenson's recommendation for an increase in fees for accounts that do not respond to late payment notices and her phone calls. She explained that she always tries several times to reach the customer and get them to pay their bill. Mr. Bergman made a motion to accept the fees as presented. Mr. May seconded. It passed unanimously. 

Mr. Price explained the water rights issues with the accounting changes made by the Division of Natural Resources regarding the Green Mountain Reservoir. He explained the Historical User Pool (HUP) creation when the reservoir was created and the ties to certain water rights for wells owned by the District. The HUP benefits in question are about 20 acre feet with a value of approximately $800,000. The SRWD's water rights attorney has filed a complaint to protect the rights to the 20 acre feet. Mr. Price stated that the facts of the case are not in dispute. The State believes that the lack of specific mention of the HUP in the SRWD's augmentation plans would allow them to take away the benefits. But the District maintains that the benefits remain because nothing mentions the HUP in the augmentation plans. It is an interpretation of the law. Mr. Price expressed disappointment that this process is taking so long to resolve, and it does not appear that it will come to a conclusion this year. 

Mr. Price provided a summary of the funding model for the Master Plan, and the foundation of the SRF loan at 2.5% is no longer valid. He described the specifics of the Bipartisan Infrastructure Law and its impact on the SRF lending process. The new additional requirements attached to the BIL will prevent the District from using local project contractors. Mr. May pointed out that the entire project must meet the requirements, so it will necessitate using very large contractors from the front range and changing the material acquisition process. The result will be to increase the overall project costs and timeline by 30% to 40%. He stated that paying food, lodging, and other expenses related to bringing workers up from the front range will be significant. The effort into qualifying the suppliers, plus the additional costs, make it very difficult to put a firm comparison together without actually going through the RFP and submittal process. The loan rate is now up to 4.6%. Mr. Price pointed out the District received a qualification last summer from the SRF team for forgiveness, but the BIL forgiveness is now clearly based on the Median Household Income. Mr. May pointed out the initially the government did not have the detailed stipulations defined. He now has concluded that pursuing the SRF will cost more and require extra effort that is detrimental to the District's projects. Mr. Bergman asked if Mr. May recommends using other funding sources, and Mr. May agreed that it would be better for the District. Mr. May stated that he and Mr. Price have been working hard to assess the funding from the SRF, but it seems like a poor option now. 

Mr. Bergman asked about the rates for SRF and what options for funding the Master Plan would be better. Mr. May stated that he tried to figure a way to use the SRF, but being in the mountains will not be a good fit for the new SRF/BIL process. He recommended that Mr. Price focus his attention on other alternatives. Mr. Bergman directed Mr. Price to find other funding alternatives and bring them back to the Board. Mr. Price explained that he can produce a new financial model that replaces the FCS model for funding the Master Plan. Mr. Bergman agreed. The Board expressed support for starting a new evaluation of financial options. 

Mr. Teodoru explained the Brightwood development's need for SRWD's approval on plans to install new pipelines to supply water to the new buildings. Mr. Price described the negotiated improvements will benefit both the District and Brightwood. Mr. May stated that the District will need to abandon certain easements that are not being used, and in exchange, the developers will move the existing old pipelines from under the parking lots to a more advantageous location along the road. Mr. Teodoru pointed out the proposed agreement in the Board packet regarding the Brightwood easement realignment and water main implementation is a confirmation letter to the Summit County Planning Department. He requested that the Board approve this letter agreement. Mr. Bowerman made a motion to approve the letter from Mr. Teodoru. Mr. May seconded. It passed unanimously. 

Superintendent's Discussion Items, Water Production and Unaccounted Water

Mr. Mentch reviewed his memo to the Board. Mr. Bergman asked Mr. Mentch to explain to Mr. Bushkuhl and Mr. Thisted how the unaccounted for water is calculated. Mr. Mentch explained how the gallons per minute are tracked operationally, and two leak detection projects are conducted in the spring and fall. When leaks are detected, excavation companies are hired to dig up and repair a portion of the water mains. 

Mr. Mentch explained how fire hydrants are being replaced proactively each summer per the Master Plan. Mr. Bergman asked how much that cost and how many are targeted. Mr. Price stated that the budget is $20,000 per hydrant with all costs. Mr. Mentch stated that it includes the asphalt repair after the new pipes are installed. 

Mr. Mentch provided his cell phone number to the new appointees. He invited them to call him and schedule a full tour of the District facilities. 

Review and Acceptance of Third Quarter Financials 

Mr. Price reviewed the financial format used for the Board reporting. He explained current assets and the ColoTrust relationship. He commended Mr. May for the outstanding financial management that is maximizing investment income. He also reviewed the payment process which includes the vendor's invoice, Transaction Detail, the check printing, and using several approvals throughout the process. He reviewed actual expenses versus budget. Mr. Price explained how the budget is created, and the challenges of forecasting revenue from tap fees. He stated that he anticipates the Board will increase tap fees about every five years, so the Board voted previously to increase the tap fees to $12,000 beginning in January 2024. Ms. Svenson explained how she researches homes for proper EQR calculations when title companies request District approval when a house is sold. Mr. Price commended Ms. Svenson for collecting hundreds of thousands of dollars in appropriate tap fees. The Board agreed. Mr. Price asked if anyone had questions regarding any aspect of the District's financials. None were forthcoming. Mr. Bergman commended Mr. Price and Mr. May for keeping the operating budget in balance and making an excellent return on the cash savings. 

Mr. May made a motion to accept the second quarter financials. It was seconded by Mr. Bergman. The motion passed unanimously. 

Preliminary Guidance on Preparing the 2024 District Budget 

Mr. Price provided a summary of the budgeting process and solicited input from the Board. He stated that inflation data is 5.1 % per the federal website for increases in expenses. Mr. Bushkuhl asked if that seems like a realistic inflation number as it applies to SRWD. Mr. May stated that acquisition of construction materials is more difficult this year, and the costs are increasing much faster than CPI. Mr. Mentch expressed that getting labor to complete projects is difficult, and that is driving up costs more than the federal government is putting into their statistics. Mr. Bergman asked if Mr. Price believes 5.1 % is acceptable for the budget and as it applies to the cost of living adjustments for Water Works West and Quality Water Management. Mr. Price acknowledged that 5.1 % is acceptable for the COLA agreements for 2024. Mr. Mentch agreed. 

Mr. May made a motion to accept the second quarter financials. It was seconded by Mr. Bergman. The motion passed unanimously. 

Board Member Comments 

Mr. Bergman led a discussion regarding a Board dinner at the Keystone Ranch. Everyone agreed on the second or third week of September. Ms. Svenson will make the arrangements. 

Mr. Bergman expressed his philosophy to the new appointees that he supports Mr. Mentch and Mr. Price to get their jobs done. He does not want to dictate how they do their work. He expressed that they have exceeded expectations in job performance, and they are a tremendous asset to the District. 


Mr. Bergman made a motion to adjourn. It was seconded by Mr. Bowerman. The motion passed unanimously. Mr. Price adjourned the meeting at 6:27 p.m. 

Respectfully Submitted, 
Scott Price Recording Secretary 

Approved by the Board of Directors 
Char Bloom