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 November 14, 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; Steve Bushkuhl; and Scott Thisted. 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 August Board minutes and the three Transaction Detail Reports. President Bergman asked if anyone had questions or comments regarding the minutes. A typographical error was requested to be changed: At the bottom of page 2 in the motion to appoint Mr. Thisted and Mr. Bushkuhl, Mr. Thisted is mistakenly repeated and should be changed to Mr. Bushkuhl.
Secretary Bloom made a motion to approve all items on the Consent Agenda with the noted change to minutes. Vice-President Bowerman seconded. The motion passed unanimously.
Public Hearing To Review and Adopt the 2024 Budget for the Snake River Water District
Mr. Price reviewed the 2024 draft budget as presented to the budget in October. He discussed the calculations for increased revenues and expenses. A brief discussion was held about the capital projects scheduled for Loveland Pass Village and the new Base 2 Storage Tank. Mr. Teodoru commented that the transition from the Summit County permit to the Town of Keystone should not pose the District any problems with the projects.
Mr. Bushkuhl made a motion to accept the 2024 budget as presented and the corresponding resolutions in the packet. Ms. Bloom seconded. The motion passed unanimously.
Approve Resolution for Water Fee Increase
Mr. Price provided a summary of the Board’s decision when adopting the Master Plan that the District would increase water user fees by 12% per year as presented in the financial model developed by FCS. He requested that the Board officially adopt the resolution in the packet that changes the Rate Schedule in Appendix B of the Rules and Regulations. Mr. Thisted asked if there had been much pushback from the community regarding the rate increases. Mr. Price summarized the public communication process of hosting meetings, website notifications, emails, social media campaigns, etc. that provided the rationale for the increases to pay for the Master Plan implementation. No one lodged a complaint or provided negative feedback because they were supportive of the necessary upgrades to the District water system.
Mr. May made a motion to approve Resolution #6. It was seconded by Mr. Bowerman. 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 new Pump Facility and Schoolmarm Transmission Line as complete. He commended Ron Mentch for keeping the system running while the tank was offline. He described the work on getting US Forest Service approval for the new storage tank location. It is hoped to begin preliminary work on the tank project in the summer of 2024. The environmental impact research and use of environmental engineers was discussed. The Loveland Pass Village project was reviewed and how AE2S is designing the specifics of replacement and the temporary water lines. A discussion ensued of the history of how SRWD acquired the water mains from the now defunct Loveland Pass Village Water District and the frequency of leaks in the area.
Mr. Bergman, Mr. Bowerman, and Ms. Bloom commended Mr. May for doing an outstanding job managing the projects. Mr. Price stated that Mr. May’s attention to detail and knowledge of construction in our District has probably saved SRWD millions of dollars over the past few years. Everyone agreed that the District is very fortunate to have someone with such skill to protect our best interests.
Funding Options for the Master Plan
Mr. Price reminded the Board that they directed him to find new options for financing the Master Plan projects. The SRF Loan program has changed so much and now has federal governmental restrictions and requirements that eliminate the SRF as a viable option for the District. He described the financial forecasting he conducted based on the budget, existing reserves, investment returns, capital expenses, research and comparison of banks, loans, and bonds. Mr. Teodoru recommended that the Board move into Executive Session to further evaluate the different companies.
Ms. Bloom made a motion to move to Executive Session. Mr. Thisted seconded. It passed unanimously.
When the Board returned from Executive Session, Mr. Bergman made a motion to proceed with a bond offering and direct Mr. May, Mr. Price, and Mr. Teodoru to continue negotiations and sign engagement agreements with Municipal Capital Markets Group and a bond counsel. Mr. Bowerman seconded. It passed unanimously.
Mr. Teodoru stated that the engagement agreements will not obligate the District until final Board approval of a resolution. Mr. Price stated that several key meetings and determinations will affect certain parameters of the bond sale such as the rating received from a rating agency such as Moody’s or Standard & Poor’s. The interest rate paid on the bonds will be driven by the market. The results of Mr. Price’s research indicate that the demand for tax-free bonds is high currently, and the interest rate environment set by the Fed Reserve is relatively stable because they are expecting to lower rates slightly in 2024.
Mr. May stated that the draft timeline estimates the bonds selling in January, but it is likely that the process will not move as fast as anticipated because of the complexity of the data needed and numerous parties working together. The Board agreed that there is no urgency to close the bond offering in January, and it is prudent to move slower with more attention to details than rushing to completion. Mr. Price stated that he would provide updates as available, and the best project plans usually underestimate the time to finish, so he would not be surprised if the bond sale occurred later in the first quarter.
Administrator's Discussion Items
Mr. Price provided an overview of the need to have a website and content that is compliant with the American Disability Act. A new Colorado state law was passed to require all governmental agencies to meet the accessibility requirements by July 1, 2024. He informed the Board that the District is hiring an expert in website accessibility to conduct the conversion of content for compliance. He also gave a summary of the projects for a new billing solution and metering software upgrade.
Mr. Price provided an update on the PFAS sampling efforts, class action lawsuit settlements (3M, Dupont), as well as work with AE2S’ assistance with state grants for PFAS work. Mr. Bry stated that there will be another grant funding application period in January. There are two sampling and testing processes for 1) EPA and 2) voluntary testing of wells. Mr. Teodoru stated that he and Mr. Price had met with the Colorado Attorney General’s office, and they assured the District that it does not need to hire specialty law firms that are soliciting to help with the settlement process (for a 40% fee). Mr. Teodoru expressed his confidence that Mr. Price and AE2S will be capable of handling the additional challenges of the PFAS detection.
Mr. Price stated that the District’s water rights attorneys continue to work on the complaint against the state Division of Natural Resources. There is no argument about the facts regarding the Historical User Pool. There is a different interpretation of the benefits to the HUP if it is not mentioned in augmentation plans. The Colorado River District is in agreement with SRWD and is providing some support in the process.
Superintendent's Discussion Items, Water Production and Unaccounted Water
Mr. Mentch reviewed his memo to the Board. Mr. Bergman asked Mr. Mentch about the leaks in the water system. Mr. Mentch described some of the leaks that have occurred, and he explained how the percentage of unaccounted water fluctuates. He then presented the ways the Operations team proactively detects leaks. The Board thanked Mr. Mentch.
Review and Acceptance of Third Quarter Financials
Mr. Price reviewed the quarterly P&L and Balance Sheet. He explained items of interest that are highlighted in his memo in the packet. There was a brief discussion about the positive financial results and the excellent management of expenses. Mr. Price pointed out that the increase in inflation has produced a much higher rate of return on the ColoTrust funds, which has resulted in over $50,000 per month in investment income. Mr. Bergman commended Mr. Price and Mr. May for good management of the operating budget. Everyone agreed that the non-revenue income was surprisingly positive.
Mr. Bowerman made a motion to accept the third quarter financials. It was seconded by Mr. Bushkuhl. The motion passed unanimously.
Approval of Contract Addenda for Water Works West and Quality Water Management
Mr. Price reminded the Board that Water Works West has the contract with the District for Water Operations and Quality Water Management has the contract for District Administration. Each agreement has an annual renewal clause requiring the Board to approve an addendum. Mr. Price stated that Mr. Teodoru had drafted and approved the addenda, including the cost of living adjustment based on the 5.1% inflation rate approved by the Board at the August meeting.
Ms. Bloom made a motion to accept the third quarter financials. It was seconded by Mr. Bushkuhl. The motion passed unanimously.
Mr. Bergman stated that additional work required to manage the District’s responses regarding PFAS would need a change order from Quality Water Management for additional scope of work. Mr. Teodoru had written the change order into a contract addendum based on 25 hours per month. Mr. Price explained that his estimate of time would fluctuate month-to-month based on the activities and tasks needed at various times. Everyone agreed that the hours seemed reasonable, and no one knows the requirements from the EPA or CDPHE because the regulations for PFAS are still in unapproved status.
Mr. Bowerman made a motion to authorize Mr. Bergman to sign a change order for 25 hours per month based on the addendum being delivered from Mr. Teodoru. It was seconded by Mr. Thisted. The motion passed unanimously.
Board Member Comments
Ms. Bloom commended Mr. Bergman for leading a good meeting.
Adjournment
Mr. Bergman made a motion to adjourn. It was seconded by Mr. May. The motion passed unanimously. Mr. Price adjourned the meeting at 5:45 p.m.
Respectfully Submitted,
Scott Price Recording Secretary
Approved by the Board of Directors
Char Bloom
Secretary