Carney Foy: Introductions of Tom Hall, Linda Dillon, and guest speakers Priscilla Lucero and Olga Morales.

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1 Casas Adobes Water Company Meeting Minutes Start of meeting: 7:05pm Pledge of Allegiance and sign-in sheet passed around. Carney Foy: Introductions of Tom Hall, Linda Dillon, and guest speakers Priscilla Lucero and Olga Morales. Carney also reminded the audience that the web site has much information and is located at: Priscilla and Olga have assisted in many mutual domestics. They were instrumental in securing awards in Grant County. During the most recent legislative session (2013) Grant County entities were awarded almost $1.9 million in Colonias Infrastructure Funds. Projects and awards include: Hanover Mutual Domestic Water Association, $175,206 for water system Improvements; Hurley, $519,671 for phase I of water system improvements; Grant County, $299,970 for engineering and design on North Hurley Road; Tyrone Mutual Domestic Water Association, $121,366 for water system improvements; Bayard, $417,871 for water system improvements, including rehabilitating broken lines and well rehabilitation; and Silver City, $361,306 to replace clay pipes between Boston Hill and Market St. Carney then turned the program over to Priscilla. Priscilla indicated that she works from Silver City, and has been working with Southwest Council of Governments for 26 years. Her primary region is working within a 4 county area, including Grant, Luna, Hidalgo and Catron Counties. This includes all the smaller communities within these counties. Priscilla s expertise is finding the funding for these community projects. She worked with all levels of government legislature, including federal, state, and city. Olga took over the program and indicated that she works from Las Cruces as a Rural Development Specialist for the Rural Community Assistance Corporation. Her primary goal is to help small water systems develop operational capacity financial and managerial. A public water system is defined as having more than 15 connections or 25 people. Right now Casas Adobes Water Company, Inc. is a private entity because it is privately owned. If this process is accepted to the residents on becoming a Mutual Domestic Water Consumers Association (MDWCA), this new water entity would become a public entity. Mutual Domestics are specific to only 3 states, NM, TX, ad CA. TX and CA are private, NM is a public entity. There are over 300 Mutual Domestics in the state of NM. The goal is to organize entities to the point where they will become eligible to receive public Page 1 of 5

2 funding. Once funding is received, you then are truly established as a public entity. There are pros and cons to switching to a public entity. You can operate in a smoother manner, make your own decisions, and determine your own path. Negative aspects; you will be monitored and everything involving the entity is open for the public inspection. You must abide by the laws of The Sanitary Projects Act (SPA) which was enacted in Mutual Domestic can easily be formed with 3 people/members. Your entity applies for a tax ID number, need a name, and then you are established. Recommended path of actions: - Meeting to educate community. Community needs to be involved. Board needs to be established by the community. This board will be legal representation for the newly establish water company in the community. - Set up Water Users Agreement. - Property owner can choose to be part of the entity or not. If they choose, they will become a member by paying a membership fee. If you choose not to participate, water will not be provided. If you decide to drill a well the office of state engineer will have to be notified to determine if a drill can be established. Right now, drilling a well is not allowed via the Casa Adobes covenants. - Again membership is totally optional and this decision can be changed at a later time. However, if you choose to become a member at a later date you will not be denied; as long as they have the capacity to serve the request, and it is already connected into the infrastructure. - The Board of Directors could have increase membership fees from inception, making a membership fee more expensive than at original time of sign up. - Once the Mutual Domestic established, the ultimate goal is a sustainable water system. Q: What is the incentive to do this? A: With no water- property value is worth nothing. Once the initial process is completed, you develop an ongoing business plan. Q: How much is it going to cost? Initially? Olga cannot answer that question, prices will vary depending on how many people sign up, fees for postage, documents, seals, etc, and let the Board of Directors decide. But if you don t start the process, you will never get to the finish. Right now you pay bills, that will always continue; you will just be assessed a membership fee. Everything else should remain the same. Nancy Whatley takes Microphone: Establishes that Casas Adobes needs to move forward. Community needs to moderate the process. This will be good for the future for Casas Adobes. Page 2 of 5

3 Q: If we are currently a private company what is the transition period as we turn into a public entity? A: Transition period is fairly simple, owner of private entity would have to be in compliance. As private owners work on this, the public entity can get started. It can be seamless. Q: Who is paying for the Engineer? A: Since the system already exists, it is not a new system. The cost will not be that of a new system. We will need an engineer to see the priorities of the system. History has to carry over. Hopefully the grants will pay for the engineer, but cannot guarantee. Many of the smaller questions will be answered as they move forward in the process. Need to cover the little things as they come. Again, it depends on the needs and how many people sign up. Remember, more people, less cost. Q: Does the Preliminary Engineer Study need to be paid for up front? A: No. Priscilla and Olga work with entities and make it clear this expense will only be paid if contingency funding is available. The engineering firm will agree to this within their acceptance under the request for proposal. Some may not, while others will. It will increase their workload now, for a future revenue stream. The initial fees are just to facilitate the decisions, not the engineer study. Q: What if you do not initially sign up, but then request water after everything is in place? A: Board can deny only if they don t have the physical infrastructure or they are at water rights capacity. If you deny enrolling initially and do not pay initially-you will they have to pay when you request water. Warning: the fees can be much higher based on what the Board of Directors decides. Q: Can we finance this membership fee by paying on a monthly basis? Does it have to be a lump sum? A: Membership requires the lump sum. Q: What is an assessment? Assessment is responsibility of all members to cover the operating expenses. If at the end of the fiscal year, the costs are up, then it is the membership s responsibility to contribute to cover the expenses. You are a public entity; the books must not be in a deficit. If expenses exceed revenue, additional fees could be assessed to make up the difference. Q: Only 130 lots are living with connections, what about the vacant lots? Can you include those in the membership? A: No. Standby fee can be assessed to vacant lots to pay for the improvements to the infrastructure system, but those who are using the service pay for the service. The overall goal of this entity is to recognize the Safe Drinking Water Act (SDWA); which must guarantee safe drinking water. If you choose to not join the mutual Page 3 of 5

4 domestic, you have to find your water elsewhere. If you drill or truck it in, it is your responsibility, nobody will regulate for you. Nobody will monitor the quality. Q: If you have a membership and you sell your property, does membership go with the property? A: Yes and no. You can sell the water meter and rights, but you must cancel your membership with the entity, and the new owners must get a new membership. Must also make sure there is water capacity, or the new owners can be denied by the board of directors. Q: If you are not part of the membership, can the water association put a lien on the property? A: No, if not a member, the new owner must figure out their own water. Q: There is poor communication in this community. Is there a better way to communication? A: You need to figure that out. Some smaller communities put notices in utility bills, have flyers where large groups of people gather, and just word of mouth works. Q: If nothing happens with the mutual domestic, what happens if a water line busts? A: You will have no water. Olga remembers with Hanover went dry. The National Guard and Red Cross had to be called in to continue to provide water. It was a mess. We don t want to go down that path. If this happens, the State can intervene and penalties might be assessed. It is hard to predict. We have the responsibility to be proactive. Q: Would the corporation have the right to assess fees to fix the system? A: Not sure. Q: Is there an agency that monitors how much we pay for the water rights? A: Mutual domestics are regulated, but there is not an agency to regulate water rights. The value of Water Rights depends on where it is located within the state, and it is driven by the market. In Santa Fee it can be $5,000/acre, in Las Cruces, it can be $3,500/acre. The nice thing about Mutual Domestics is that they can be dissolved just as quickly as it is organized. You can back out really quick if you hit a bump in the road. Q: What comes first, the membership or the board? A: Membership comes first. Q: How do you tell the members how much to pay. A: You can establish an advisory committee to research all these things, and then establish the membership. Then the board comes. This should be the way for this particular community. Olga and Priscilla will be resources and advise. A survey might be a good way to start also. Tap into the resources of the local community, including Western New Mexico University. Interns might be utilized to help in the process of gathering information. You need to work together and have a plan. Make sure you are sure you want to move forward. Don t be scared of the little things. Page 4 of 5

5 Olga asked for a show of hands of the people that perceive this process as favorable. The vast majority raised their hands. This indicated they think this is the right path to go down. At the next meeting, we will again answer any unanswered questions. Then if the consensus is to move forward, then we will try to enlist willing people that could form the advisory board. It will be important for the Advisory Board Members to have a good working relationship with Olga and Priscilla. Q: What if members have multiple properties? A: you can have Unlimited properties, but must pay a membership fee for each property (same as a water bill), but you only have 1 vote in overall elections. End of Meeting: Next meeting is scheduled for October 3, 2013 Thursday. At 6:00pm Meeting adjourned: 8:45pm Submitted by Carston Foy Page 5 of 5