FVAWD draws fire over rate increase
By: Nicole Osborn, Tri-Lakes Tribune
03/28/2006
Residents of Forest View Acres Water District questioned the board about its debt and fee increases at the monthly board meeting Thursday, March 23.
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The board fielded questions from residents in attendance. Most of the questions stemmed from the debt the district has acquired.
It is alleged that Patricia Unger, who worked independently under contract for the district for more than a decade, embezzled as much as $625,000 from the district.
Her criminal trial will be held April 18.
Responding to one citizen's question, the district's attorney Paul C. Rufien, PC gave three reasons why the board is not liable for the monetary losses the district has taken from the alleged embezzlement.
Rufien said there has to be intent to be defrauded, nobody has sued the district to find them liable for the money that has been lost and there is government immunity to protect the current board. He added, so far, indications are that a contractor working for the district is at fault for the debt.
Board President Barbara Reed-Polatty questioned Rufien as to how much it would cost the district to defend against a lawsuit if one were filed by residents.
Rufien said, for a class-action lawsuit, cost would depend on a number of factors, but could add up to around $100,000.
Rufien said, for an individual taxpayer, he or she would have to prove individually how he or she was affected. He added the taxpayer would be suing to prove a point because it would cost them more to hold a trial than he or she could get from the district. He said, if the district were sued, it would probably come in the form of a class-action law suit.
District resident Ted Hatzenbuhler questioned the board about a $90 water bill he received. He said he knows what the district is going through, but claimed he thought it had insurance.
Reed-Polatty said the district was insured, but crimes against the district were not covered.
She explained some of the water bill is being paid based on property tax. She added other reasons for a high water bill are that the board voted to increase the service fee by $25 at the board meeting Jan. 26. Also, the district is paying for Special District Management Services Inc to help the district get back on track.
Residents now pay $43 as a service fee, $26 for a debt service fee, plus water usage. Neither the debt service fee nor water usage fee were increased along with the service fee.
"The bottom line is the rates were raised to balance our budget," said Treasurer Brian Cross, adding that not only is the district paying for the debt associated with the alleged embezzlement of money, but they are also faced with debt to maintain the district.
"It's just me and my wife and we don't even use that much water," Hatzenbuhler said.
"(The district was) robbed, we're hurting badly," said Assistant Secretary Ketch Nowacki.
Hatzenbuhler questioned why the district does not go to the town of Monument. He said he did not see how it could cost as much as FVAWD residents are paying now.
Reed-Polatty responded that the town would assume the debt of the water district.
Nowacki said it would cost residents as much, if not more, than they are paying now to join Monument's water system.
In response to another question, Rufien said in order for the district to declare bankruptcy, it would have to prove an increase of 100 mills would not cover debt.
"Believe me, it'll be more than $25," Zimmermann said.
The board also reviewed letters it received from residents with concerns about the $25 increase.
"(The board members are) not trying to make light of the situation," Cross said. "We're trying to balance the budget."
District resident Judy Michali said she plans to get involved with the board and said if she had known Rich Crocker, a member of a previous board was taking an open seat this May, she would have run herself.
"You have the solution, and that's getting involved," Cross said, encouraging all residents to do the same.
In other news:
* The Forest View Acres May election has been canceled because no more petitions than open positions on the board were submitted.
Rich Crocker, Ketch Nowacki and Eck Zimmermann will be sworn in at the May meeting.
Nowacki and Zimmermann are presently on the board and Crocker is returning to the board after stepping down in 2000.
Lisa Johnson of Special District Management Services Inc. took over as secretary to the board. Johnson is replacing Kammy Tinney who left SDMS.
©Colorado Community Newspapers 2006