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 13, 2024, 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 meeting, constituting a quorum: William Bergman - President; Bill Bowerman - Vice President; Randy May - Treasurer; Steve Bushkuhl – Assistant Secretary; and Scott Thisted – Assistant Secretary; Steve Martin – Director. 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.
CONSENT AGENDA
Mr. Price reviewed the information in the packet regarding the May Board minutes and the three Transaction Detail Reports. He asked if anyone had questions or comments regarding the minutes or reports, and none were expressed.
Director Bushkuhl made a motion to approve the Consent Agenda. Vice-President Bowerman seconded. The motion passed unanimously.
ELECT A NEW SECRETARY
Mr. Price asked if anyone would like to nominate a new Secretary to replace Ms. Bloom who had resigned. Mr. Thisted nominated Mr. Martin. Mr. Martin confirmed that he was willing to serve in the position. Mr. Bushkuhl seconded the motion. The motion passed unanimously.
APPROVE AGREEMENTS FOR CAMBER TOWNHOMES
Mr. Price explained the process for Water Main Extension Agreements and Water Service Improvement Agreements. He described the project requested for Camber Townhomes, and he stated that the agreements in the packet were the standard language approved by Mr. Teodoru. There was a brief discussion about the location, number of units, and impact on the District’s distribution system.
Secretary Martin made a motion to approve the agreements. Mr. Bowerman seconded. The motion passed unanimously.
CAPITAL PROJECTS UPDATE
Mr. May directed the Board’s attention to his update in the packet. He provided a summary of the work being conducted to improve the District’s water system.
Mr. May provided an update regarding the new Base 2 Storage Tank project. It is still possible to get the necessary approvals to enable an access road to be roughed-in this summer. That access will be used to conduct soil testing which will determine the specifics of the tank design on that particular site. The plan is for construction of the tank to begin in the summer of 2025 at an estimated cost of about $7,000,000.
There was a discussion regarding the Loveland Pass Village project. Mr. May assured the Board that Stan Miller Company was an experienced contractor on similar projects, and the impact on traffic and homeowner water service would be minimized as much as possible. Mr. Price and Ms. Svenson were communicating with the LPV homeowners through a new email list and the website.
Questions were answered about the Base 2 Water Plant improvements. The building will be remodeled to accommodate a new chlorine generation system that will increase safety by eliminating the pressurized gas cylinders. The soda ash handling will also be safer by designing equipment to assist with mixing procedures. The building will not need to be expanded. Mr. Bry explained the new design and how it will improve maintenance.
ADMINISTRATOR’S DISCUSSION ITEMS
Mr. Price referred the Board to the report in the packet. He provided a summary of the software conversions for billing, metering, and the website. The new portal has been successfully adopted by numerous customers that prefer to pay their water bill online using a credit card. There are still a few minor issues with the integration of the billing system and the cloud-based metering system. The District licensed the ESRI online mapping system and hired AE2S’s GIS team to improve the data design and layers of the system. These improvements were coordinated with the Operations Team.
There was a discussion about the PFAS detection in the District’s wells. Mr. Price emphasized that the Colorado Department of Public Health and Environment’s PFAS team had supplied public notifications that clearly stated that there is no immediate public health risk. This message has been communicated to constituents that have called or emailed with concerns. The Administration Team has informed the customers through website updates, a mailer to account holders, calls with property managers, and notices to HOAs. The Feasibility Study is the next step in addressing the PFAS detection. Mr. Bry summarized his Feasibility and Funding Update in the packet. AE2S’s team will be coordinating pilot testing of recommended filtering technologies and evaluating the best options for SRWD. The District is applying for additional grant funding to help pay for the study. Several directors asked questions which were answered by Mr. Bry, Mr. Mentch, and Mr. Price regarding the water sampling, testing facilities, and pilot testing solutions. The report from the Feasibility Study is expected to be finalized in 2025.
Mr. Price described the work being conducted by Mr. Porzak and Mr. Kruse regarding the water rights complaint against the state. He directed the Board’s attention to Mr. Porzak’s water rights legal report in the packet. He summarized the discovery phase of the District’s lawsuit against the State and Division Engineers. There will be depositions for Tom Oberheide and Mr. Price on August 16. Both sides have filed for summary judgment.
Mr. Teodoru led a discussion about replacing the old contracts for Water Works West and Quality Water Management. He has desired for some time to use a more institutionalized agreement rather than the more individualized agreements from the past. His new model contract would enable quickly and easily changing scope through a mechanism like a task order. The Board discussed their desire to continue with cost of living adjustments, while also having longer term relationships with the key service providers. They acknowledged that the District workload has greatly increased through the adoption of a Master Plan with significant capital projects, funding requirements, oversight, accounting, and management needs. Mr. Price expressed that he enjoys his job and the relationship with the District. He emphasized the benefits of his team’s skills in performing the additional work, and he specifically mentioned Ms. Svenson and Mr. Drees as dedicated to continuous improvement of processes and documentation.
Several directors thanked Mr. Price for being proactive in addressing succession planning to help stabilize the business functions of the District. Mr. Price stated that he is currently grooming Mr. Drees to learn the water administration of SRWD for when Ms. Svenson decides to retire. Mr. Bergman asked Mr. Teodoru to write the new agreements and provide them to the Board at the November meeting instead of the one-year extensions. Mr. Teodoru stated that he would draft the documents and submit them for consideration before the November meeting.
SUPERINTENDENT’S DISCUSSION ITEMS, WATER PRODUCTION AND UNACCOUNTED WATER
Mr. Mentch reviewed his memo to the Board in the packet. He explained that the unaccounted for water level is higher than expected. They are seeing daily demand numbers that are much higher when water is being pumped as opposed to relying on the storage tanks. The outside leak detection was recently running their analysis in the District. Their investigation has not identified any significant leaks. He pledged that his team would get to the bottom of the root cause. He asked if the Board had any questions regarding his data in the packet. He said that the leak detection company that has provided services to the District will not be available going forward because the owner is reducing service area as he prepares for retirement. Mr. Mentch stated that he is investigating the purchase of the specialty equipment that his team can use to detect leaks. Mr. May expressed support for the idea of acquiring the equipment so that the District will have more frequent or ad hoc leak analysis.
DISCUSS A NEW POLICY REGARDING LEAKS
A discussion ensued about leaks that occur between the water main and the curb stop. Ways to address such a leak by the District were considered. Mr. Bergman asked Mr. Teodoru to discuss how other districts handle situations of leaks upstream of the curb stops. Mr. Teodoru stated that most districts define the water main to the curb stop as ownership by the district, and the curb stop to the house is the responsibility of the homeowner. However, the SRWD rules define the customer’s responsibility begins at the water main. The discussion ensued about the costs of making repairs between the main and curb stop. Mr. Teodoru presented a policy that would define the District’s intention to make such a leak repair up to the curb stop. He emailed a document to Mr. Price that afternoon, so it was not included in the packet. He explained the policy gives the District the discretion to make a call to do the work ourselves and whether we would ask the homeowner to assist in paying for the work. He believes this will benefit the homeowner. He stated that the policy gives the District more flexibility.
The draft Resolution #3 was handed out to the Board. Mr. Teodoru addressed the Board’s questions about the details of the policy. Mr. Mentch clarified that the service line is owned by the homeowner, and his expressed support for the policy to allow him to get a leak fix immediately. Mr. Teodoru recommended that the Board adopt the resolution.
Mr. Bergman made a motion to adopt Resolution #3. Mr. May seconded. The motion passed unanimously.
REVIEW AND ACCEPTANCE OF SECOND QUARTER FINANCIALS
Mr. Price reviewed the January through June P&L and June 30th Balance Sheet. He explained items of interest that are highlighted in his memo in the packet. He answered questions about interest income, maintenance expense, and revenue timing result in higher billing in October based on irrigation in the summer. A discussion occurred regarding the legal fees for the lawsuit against the state. Mr. Price stated that the District will be significantly over budget this year because the state continues to press toward a trial. The discovery and expert witness reporting has been cost intensive. If the judge does not award a summary judgment, then the costs will continue to be incurred through next year.
Mr. Bushkuhl made a motion to accept the financials as presented. Mr. May seconded. The motion passed unanimously.
PRELIMARY GUIDANCE FOR 2025 BUDGET
Mr. Price directed the Board’s attention to the draft budget in the packet. Mr. May stated that he had instructed Mr. Price to use a 5% increase across the board to account for inflation. He mentioned that construction cost inflation is in the 12-14% range for capital projects. Insurance costs are expected to increase industry-wide by about 20%.
The Board discussed many of the budgetary items. Mr. Price answered questions about increases, current year’s expenses, and outliers. Mr. Price mentioned the closure of a coal-fired electricity plant in Colorado that is reportedly going to have a negative impact on electricity costs. It was discussed that the District has not needed to use its Operating Contingency. The discussion concluded with the Board indicating that no guidance for changes to the draft budget was needed.
DISCUSS LONG-TERM INVESTMENT OPTIONS
Mr. Thisted reminded the Board about the discussion during the previous meeting about considering forms of investment other than ColoTrust. He expressed that the consensus view of the future is that interest rates will decline, and he suggested that it would be beneficial to lock in higher rates now on long-term investments. There were questions about the risk/reward related to the liquidity and length of the investments. A discussion about amounts, rates, maturities, and the expected cash surplus decreasing as the capital projects are completed. Mr. Thisted explained yield curves and treasury instruments. Several directors were unaware of any investment policy approved by the SRWD Board, so they requested a copy to review at the next meeting. Then, they will decide if other investment alternatives would be used.
REVIEW LEAK DETECTION STRATEGY
Mr. Teodoru introduced a discussion about how the Board decided a few years ago not to monitor the metering system leak suspect reports. A discussion was conducted that the meter system is not accurate enough to have staff review reports daily. The Board confirmed that the current process is adequate, and no change is necessary. Mr. Teodoru stated that he believes this is the best way to proceed.
BOARD DINNER
Ms. Svenson summarized the plans for the September 26th dinner at the Keystone Ranch. Most of the directors confirmed that they would be in attendance.
BOARD MEMBER COMMENTS
The Board directed staff to purchase awards for former directors and present them as tokens of appreciation at the dinner.
ADJOURNMENT
Mr. May made a motion to adjourn. It was seconded by Mr. Bowerman. The motion passed unanimously. Mr. Price adjourned the meeting at 5:55 p.m.
Respectfully Submitted,
Scott Price
Recording Secretary
Approved by the Board of Directors
Steve Martin
Assistant Secretary