Our Community News, January 7, 2006
District increases fee, approves 2006 budget
By John Heiser
At its regular monthly meeting Dec. 7, the Forest View Acres Water District (FVAWD) board of directors approved a $25 per account monthly administrative fee increase and conditionally approved the budget for 2006. Grace Best Elementary School was locked, so the meeting was moved to Arby’s restaurant. Two district residents other than board members were in attendance.
The five-person board consists of President Barbara Reed-Polatty, John Anderson, Brian Cross, Ketch Nowacki, and Eckehart Zimmermann. Reed-Polatty was absent. Cross presided.
Administrative, bookkeeping, and accounting services for the district are provided by Special District Management Services, Inc. (SDMS). Kammy Tinney, SDMS District Manager, served as facilitator and secretary at the board meeting. Attorney Paul Rufien provided legal advice.
The district has a contract water operations manager, Dan LaFontaine of Independent Water Services, who is responsible for maintaining the equipment and infrastructure and for managing all aspects of water delivery.
Background
In December 2004, the board uncovered the apparent theft of funds from the district’s bank accounts. In February, a warrant was issued for the arrest of former contract office manager Patricia Unger on charges of embezzling more than $212,000 in district funds. That amount was later increased to $315,000. Unger surrendered to authorities Feb. 16, 2005, and was released on $50,000 bond to await a preliminary hearing. Unger rejected a negotiated mediation agreement and waived a preliminary hearing on the charges. The criminal trial is scheduled to begin March 7, 2006. The felony charges Unger faces carry a potential sentence of 4 to 12 years.
The district has filed a civil suit against Unger and her husband, Dennis, to recover the missing funds and associated costs. The civil trial is scheduled to begin July 18. The district’s attorneys hired Sheri Betzer, a forensic auditor. According to information released by the board, Betzer estimated the total financial loss to the district at not less than $625,000.
May election
Cross, Nowacki, and Zimmermann must run for election in May 2006. The terms of Reed-Polatty and Anderson expire in May 2008.
The board unanimously appointed Tinney to serve as the district’s election official for the May 2006 election.
Self-nominations for the three vacant board seats may be submitted to Tinney between Feb. 1 and Feb. 27. If the district receives no more than three self-nominations, the May election will be called off on Feb. 28 and the candidates declared the winners.
District residents interested in running for the board or who have operational or management questions or comments are asked to contact SDMS at 488-2110 or (800) 741-3254.
Higgins inclusion approved
Doug Higgins has submitted a petition for inclusion in the district. Higgins’ property is about 39 acres of undeveloped land. He has agreed not to subdivide the property and has agreed to pay legal fees (estimated at $2,500), the cost of running pipe to his property, the cost to the district for performing an engineering review of his plans (estimated at $1,000), and to transfer to the district the water rights associated with his property. LaFontaine said Higgins already has rights to one tap, so no tap fee is required.
Higgins asked for a waiver of the district’s inclusion fee, which is estimated at about $117,000 for the property. Rufien noted that the inclusion fee was waived as part of last month’s approval of the inclusion of Leroy Schmidt’s similar 40-acre parcel.
Higgins noted that, unlike Schmidt, he does not need temporary service since he does not plan to connect to the system for one to two years. LaFontaine suggested Higgins plan on connecting to the planned line to be run to the Red Rock Reserve project. Red Rock Reserve was formerly known as Raspberry Ridge.
Following a public hearing during which no one spoke in favor or opposed, the board unanimously approved the application and directed Rufien to prepare the documents.
Financial report
Tinney requested that the board approve payment of claims for November totaling $13,600, which included $4,416 for LaFontaine’s services, $2,500 as partial payment to Henkle Drilling, $2,393 for electric service, $2,336 for delayed billing from Palmer Lake Sanitation covering several months, and $1,000 as partial payment to Betzer.
As of Nov. 30, the district’s debt stands at $659,857 comprised of $545,000 in bonds and $114,857 in accounts payable. The accounts payable is comprised of $58,899 owed to attorneys Petrock and Fendel, $34,242 owed to SDMS, $14,299 owed to Henkle Drilling, $4,740 owed to Betzer, and $2,678 owed to Rufien.
The balance in the enterprise fund declined from $21,377 on Jan. 1 to a debit of $4,823 on Nov. 30.
The balance in the debt service fund declined $7,606 from $2,552 on Jan. 1 to a debit of $5,054 on Nov. 30. The debt service funds pay off an $880,000 bond issued in 1995 and a $45,000 loan obtained in 2004.
The capital projects fund received $25,000 in tap fees and the proceeds of a Department of Local Affairs (DOLA) loan of $172,498 and a state health department loan of $10,000. On Nov. 30, after infrastructure expenses totaling $181,777, that fund balance stood at $26,821.
The net cash balance for all funds as of Nov. 30 was $17,366. Accounts receivable from customers stood at $422.
Tinney noted that the $17,700 debt service payment due on Dec. 1 was paid.
The financial report was unanimously accepted.
2005 budget amended
The board unanimously approved an amendment to the 2005 budget setting the following amounts:
General Fund: $205,000
Debt Service Fund: $90,260
Capital Improvement Fund: $200,000
Enterprise Fund: $175,000
2006 budget approved;
$25 administrative fee increase approved
Tinney presented the proposed budget and said it needed final adjustments based on additional information to be provided by LaFontaine regarding capital improvements needed during 2006. Tinney noted that the final 2006 budget must be approved by Dec. 31 and filed with DOLA by Jan. 31. The proposed 2006 budget included the following totals:
General Fund: $109,500
Debt Service Fund: $90,741
Capital Improvement Fund: $53,000
Enterprise Fund: $270,900
Revenue from the Red Rock Reserve development was not included in the proposed budget.
Cross said the capital improvement fund as budgeted would result in about an $80,000 shortfall compared to projected expenses. He calculated that since the district serves 280 accounts, the shortfall would be about $24 per account per month.
He added that if a property tax mill levy were used to increase revenues, a ballot measure must be passed.
Tinney noted that even if the ballot measure were approved, the property tax revenue would not be received until 2007.
Rufien added that an advantage to an administrative fee increase would be that the board could adjust the fee as needed, whereas “a mill levy should be considered permanent.”
Nowacki said the shortfall is due to administrative problems, so the answer should be an administrative fee increase.
Anderson said that some in the district would see it as a “smack in the face.”
Nowacki replied, “Everybody knows we had this nasty event occur to us.”
Nowacki’s motion to increase the administrative fee by $25 to $43 per month, seconded by Zimmermann, was unanimously approved. Tinney said a notice would be sent in January, with the fee increase to be applied with the February billing.
The board then unanimously approved the proposed 2006 budget subject to final adjustments.
Tinney noted that a phone poll would be used to obtain the final approval of the 2006 budget with adjustments for the administrative fee increase and estimated capital improvement expenses.
Billing for availability of service (AOS) to resume
The board unanimously approved retroactive billing for AOS fees due in 2004 and 2005. They decided to forgo billing for earlier years.
A request for waiver of AOS fees was denied. Rufien said he strongly encouraged the board to have a “no waiver” policy on AOS fees.
Hotshots camp inclusion tabled
LaFontaine reported that initial discussions had been held regarding inclusion of the Hotshots firefighter camp in Pike National Forest. He noted that no petition for inclusion had been submitted.
The board tabled the matter until more information is available.
LaFontaine’s contract extended
The board unanimously approved LaFontaine continuing to work on a month-to-month basis under the terms and conditions of the current contract until both sides approve his new one-year contract.
Agreement with fire authority approved
The board unanimously approved an intergovernmental agreement with the Tri-Lakes-Monument Fire Rescue Authority for fire hydrant maintenance, testing, and operations. LaFontaine said the agreement imposed no additional costs on the FVAWD.
Operations report
LaFontaine reported that the district’s surface plant produced 1,601,200 gallons in November, averaging 37.1 gallons per minute over 30.0 days. The district’s well produced 620,000 gallons during 4.1 days of operation, averaging 105.8 gallons per minute.
He added that there have been no problems with freezing of the surface plant. He said the plant is obtaining water from under the ice.
LaFontaine said he completed 74 cross-connection and curb stop inspections, finding one cross-connection violation that was corrected. All bacteriological sampling and reporting requirements of the state health department were satisfactorily completed.
Meeting day changed to fourth Thursday
The board unanimously approved changing the meeting day and time to the fourth Thursday of each month at 5:30 p.m.
No executive session needed
Rufien noted that there was nothing new on the Unger and Wells Fargo situations, so no executive session to discuss legal issues was needed.
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The next meeting will be held Jan. 26, 5:30 p.m. Board meetings are usually held on the fourth Thursday of each month. The location varies from month to month. Those wishing to attend should check the date, time, and location by calling the district at 488-2110.
