The Pine Strawberry Water Improvement Board at its last meeting approved the award of a nearly $70,000 contract to CH2M Hill, a water engineering and consulting firm that already operates the water district under contract.
Approval of the contract proved among the last actions ever taken by the board. Two days later, five of the seven board members resigned in the face of a bitter recall election.
Their resignations threw management of the district into the laps of the Gila County Board of Supervisors, which has scheduled a Dec. 11 public meeting to talk about the district’s future.
Resigning board members later said that they wanted to make sure that they had an approved contract to run the district pending an election to pick a new board.
In addition, the district had to wait to take major new actions until completion of the master plan anyway, they said.
The district received a $25,000 discount on the master plan by agreeing at the same time to give the consulting firm a five-year extension on its contract to run the water district. The firm provides the people who mostly run the water district for about $1 million annually.
The three-hour board meeting was dominated by conversations about repairs and upgrades, thereby underscoring the need for the master plan after three years of crisis and improvisation.
The master plan will provide estimates for future infrastructure, storage needs, total well production needs, recommendations for overhauling the aging system and estimates of future water demand.
The master plan will give the district a blueprint for upgrading the system in a way that will also accommodate future needs as the remaining vacant lots in the community develop.
Experts have estimated that the district will ultimately have to spend perhaps $12 million to upgrade and expand the system. The cost of buying the aging system from Brooke Utilities coupled with the unexpectedly high cost of repairs and an effort to provide additional sources of water has already forced sharp increases in water rates.
The board intends to seek voter approval of a $7.5 million bond issue to implement the upgrades indicated by the master plan.
The board planned to fund a master plan to guide repairs and upgrades this year, but the need to spend about $150,000 on a water outage and problems with silt in the water exhausted the budget.
Fall Yeager, a project manager for CH2M Hill said the firm would partner with Verde Engineering in Payson, which has done a lot of engineering work for the water district in the past.
The master plan will project build-out demand, hydrology, capacity and how to provide enough water pressure for fire hydrants.
Yeager said the consultants would use advanced mapping technology to produce a three-dimensional map and model of the water system to help project water pressure and flow and figure out where the district needs more wells or storage.
The district has increased its total water supply since buying the system from Brooke Utilities enough to eliminate water rationing, summer water hauling and a building moratorium, although rates have risen significantly.
Yeager said that because the water district can only measure a customer’s water use once a month, she will rely on water use patterns in Payson and elsewhere to predict things like peak and seasonal demand.
Board member Sam Schwalm intervened to ask whether approving the five-year contract to manage the district would “lock in” the district at fixed rates.
However, CHM2 Hill officials said the company and the district would renegotiate the price of the management contract each year.
Board member Tom Weeks said, “I wish we’d done this two years ago. This is a very good thing we finally have gotten to this point.”
Board chairman Ray Pugel said, “It would have been good to do it 20 years ago.”
“We had it in the budget,” interjected board member Gary Lovetro, “but we had the little disruption of the water outage and it cost us $128,000.”
Pugel added that the $25,000 saved by approving both contracts would nearly cover the cost of holding a recall election.
Much of the rest of the meeting demonstrated the difficulty of approving seemingly endless piecemeal repairs, which the master plan would help prioritize.
For instance, District Manager Brad Cole sought board direction on two important repairs.
One involved the $24,000 overhaul of the 13-gallon-per-minute Brookview Terrace Well, which had failed due in part to an “antiquated” electrical system.
The second repair involved the replacement of the 1.75-million-gallon Strawberry View water storage tank. An inspection had revealed 17 separate leaks in the aging metal tank, which provides the only water storage for a key area of the community.
He said the district had investigated whether it could get a 10-year, 3 percent federal Water Infrastructure Finance Authority loan, with annual payments of about $7,400 to cover the cost of the repairs.
However, the district’s finance manager pointed out that the district hadn’t included the loan or the repairs in its budget back in June. According to state law, the district couldn’t therefore spend the money even if it came from the federal government. Therefore, the district would have to either pay for the repairs out of the dwindling, $400,000 contingency budget or put the hoped-for loan in the budget in June before applying. Not yet halfway through the year, the district has spent $128,000 of that contingency fund for various repairs.
But several board members wondered whether the master plan study would show whether the district really needed either that well or that tank — or whether it needed an additional well or a larger tank to accommodate future needs.
“Should we wait for the master plan?” asked Pugel. “Is that well critical?”
“Every well is critical,” said Cole.
Several board members wondered whether putting the $7.5 million from the hoped-for voter approval of a bond issue into the budget would provide the legal cover for putting the potential federal loan money for the repairs into the budget. But the district’s finance manager nixed that idea, saying the board could shuffle debt from one budget bucket to another.
That brought the discussion back to the contingency fund.
“Are you saying we need to fix these two things immediately?” asked Pugel.
“The well is more critical than the tank, but then the tank could fail tomorrow,” said Cole.
The board ultimately opted to leave the decision on whether to make the repairs with money from the contingency fund up to Cole.