Information

Nowacki appointed to the board

Our Community News, November 5, 2005

By John Heiser

At its regular monthly meeting Oct. 5, the Forest View Acres Water District (FVAWD) board of directors appointed district resident Ketch Nowacki to fill the board vacancy created by the Aug. 24 resignation of Kevin Lonergan, former vice president of the district. The board now consists of Presi­dent Barbara Reed-Polatty, John Anderson, Brian Cross, Nowacki, and Eckehart Zim­mermann. Zimmermann was traveling and unable to attend the Oct. 5 meeting.

Administrative, book­keeping, and accounting ser­vices for the district are pro­vided through a contract with Special District Management Services, Inc. (SDMS) of Lakewood. Deborah McCoy, President of SDMS, served as facilitator at the Oct. 5 board meeting. McCoy was accompanied by SDMS Dis­trict Manager Kammy Tin­ney, CPA Susan Clyne, and attorney Paul Rufien. Tin­ney has been designated as the manager for the district. McCoy urged residents who have operational or manage­ment questions or comments to contact SDMS at (800) 741-3254.

Background

The late Hugh Nevins es­tablished the FVAWD in 1957 to provide water to 27 homes. Currently, FVAWD provides water service to 280 residences in the Red Rocks Ranch, Clovenhoof, Villas, Sundance Estates, and Shiloh Pines neighborhoods in unin­corporated El Paso County. A five-member board of di­rectors governs the FVAWD. 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.

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 subsequently increased to $315,000. Unger surren­dered to authorities Feb. 16 and was released on $50,000 bond awaiting a preliminary hearing. Unger rejected a negotiated mediation agree­ment and waived a prelimi­nary hearing on the charges. Criminal trial is scheduled to begin March 7, 2006. The felony charges Unger faces carry a potential sentence of four 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, 2006. 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 $625,000.

Selection of attorney

McCoy presented Rufien to the board and recommended that he be named general counsel for the district and special counsel to handle the civil suit against the Ungers. She urged the board to retain law firm Petrock & Fendel as the district’s water attorneys.

Rufien said he has de­grees from Colorado College and Pepperdine Law School and has represented special districts for the past 15 years, including representation in litigation. He said he also has expertise on eminent domain proceedings. He added, “It is unique to have an embezzle­ment to go as far as yours has.” He noted that although he does not have direct ex­perience with embezzlement cases, he has experience dealing with conversion and misappropriation. In response to a question, Rufien said his hourly rate is $225.

The board approved McCoy’s recommendation subject to review of Rufien’s references.

Change in procedures

McCoy stated that the district’s prior use of executive sessions to discuss and make decisions regarding de­linquent accounts is improper. She said those accounts should be discussed in open session. It was noted that one account is more than $500 in arrears.

McCoy also urged the board to eliminate the dis­trict’s bylaws. She said Title 32 of the Colorado Revised Statutes governs the district. She added, “Bylaws get in the way and can result in violations relative to Title 32.”

Nowacki appointed to fill vacancy

Reed-Polatty reported that letters of interest were re­ceived from Ketch Nowacki and Richard Crocker. Nowacki’s and Crocker’s qualifications were dis­cussed. Crocker was not present at the meeting. The board unanimously voted to appoint Nowacki.

Cross, Nowacki, and Zimmermann must run for election in May 2006. The terms of Reed-Polatty and Anderson expire in May 2008.

Financial report

McCoy presented a prelim­inary Sept. 30 financial re­port showing an operating account balance of $26,813, a debt service account bal­ance of $17,258, a contin­gency account balance of $1,501, and bond reserve account balance of $2,555. The total cash position is $48,107, up from $31,916 at the end of August. The debt service funds go to pay off an $880,000 bond issued in 1995 and a $45,000 loan obtained in 2004.

Invoices paid

The board unanimously approved checks total­ing $13,545 for a variety of bills, including $4,362 for LaFontaine’s services, $2,876 for electricity, $2,500 to Henkle Drilling (leaving an outstanding balance due them of about $11,500), $1,320 for part-time contract bookkeeper Anne Bevis’ services, and $1,000 to forensic auditor Betzer (leaving an outstand­ing balance due her of about $5,500).

No payment was made toward the approximately $41,500 owed to law firm Petrock & Fendel. Special District Management Services postponed payment of $6,742 for its services. McCoy said that SDMS and Ru­fien have agreed to defer charges for their services “six months or so until the district is operating normally.”

Operations manager’s report

Some highlights of LaFontaine’s report:

• During August, the plant that processes surface water produced 12.99 gallons per minute for 29.6 days, for a total of 553,800 gallons. For the first nine months of 2005, the surface plant produced 10.94 million gallons.

• The Arapahoe well produced 105.76 gallons per minute for 13 days, for a total of 1.98 million gallons. For the first nine months of 2005, the Arapahoe well produced 10.59 million gallons. LaFontaine added, “We used the Arapahoe more than in prior years due to the loss of the Dawson well.”

• Total monthly system usage was 2.35 million gallons, bringing the total for the year to 21.54 million gallon; 1.74 million gallons were billed for the month. The water loss percentage for the month was not reported.

• All bacteriological sampling and reporting requirements of the Colorado Department of Health were satisfied.

Schmidt inclusion

As reported in prior months, Leroy Schmidt has a house on 40 acres with a formerly low-producing well that has gone dry. He has submitted a petition for inclusion into the district. He has agreed not to subdivide the property and has agreed to pay a tap fee, legal fees, and the cost of running pipe to his property and to transfer to the district the water rights associated with his property. He has asked for a waiver of the district’s inclusion fee, which is estimated at about $120,000 for the property.

The board unanimously voted to accept Schmidt’s petition for inclusion, direct Rufien to review the peti­tion, and schedule an inclusion hearing.

Public comments

District resident Susan Gates asked about the status of the district’s indebtedness. McCoy replied that she hoped to have that information ready for the Nov. 2 meeting. McCoy added that a meeting is scheduled with a financial adviser to consider refinancing the district’s debt.

District resident Genelle Deavenport asked for the status of the Raspberry Ridge development, which is now called Red Rock Reserve. Cross replied that the project has received four major approvals from the county, but progress has been hampered by the number of entities involved in the project.

Budget discussion Nov. 2

McCoy noted that a preliminary 2006 budget was included in the directors’ packets and will be dis­cussed at the Nov. 2 meeting. She added that since the district does not have a property tax mill levy, the approved 2006 budget need not be submitted to the state until Dec. 31. (An article on the Nov. 2 meeting will appear in the Dec. 3 issue of Our Com­munity News.)

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Regular board meetings are held on the first Wednesday of each month at Grace Best Elemen­tary School, 66 Jefferson St., in Monument. The next meeting will be held Dec. 7. Those wishing to attend are encouraged to check the date, time, and location by calling the district at 488-2110.