Capital Assessment Letter (December 2013)
Dear Pine Brook Residents
One of the many things that make Pine Brook Hills a unique mountain community is our water supply. Our water is required to meet Safe Water Drinking Standards, and doe's, we have fire hydrants, which many, if not most mountain communities do not. We even have our own dam to provide water in times of drought.
As we are coming to the end of 2013, the Pine Brook Water District Board wants to give you a heads up on what is planned for the upcoming year. The approval of the 2014 operating and capital budget is planned for December 12th, and all who are interested are invited to attend. The following are some of the specifics which will be discussed at the meeting.
The water sales for the year are generally sufficient to cover the operating expenses of the water district, and typically in a year, there may be some nominal surplus or deficit, depending upon what occurs. As you know, the past year has presented challenges for all of us, and the water district is no exception. There will be some significant expenses we will be incurring due to the recent flooding. While FEMA will cover the majority of these costs, (FEMA covers up to 87.5% of expenses) the water district will be required to pay 12.5% of the costs out of the water revenues, this could exceed $60,000.00!.
On a positive note, Management has been able to negotiate a reduction in the bond interest costs for the dam of about $31,000 per year, which are paid through a property tax mill levy. This reduction will flow through to Pine Brook residents in their property tax assessments through 2029 and is equivalent to an average savings of $70 per household. This reduction will be effective January 2014.
As stated above, while water sales generally cover the operating expenses of a given year, there needs to be some funds to provide for longer term and larger maintenance costs. As an example, the water tanks should be painted every 20 years on average. None of the tanks have been painted in the last 20 years and now are needing painting.
Additionally, the retention pond on Four Mile Creek, where water is pumped to our dam for treatment, has filled with silt which must be removed. Preliminary estimates to remove the silt and haul it away are in the range of $250,000. FEMA should cover 87.5% of these costs, but the water district must cover the remaining $31,250.
To provide for these capital requirements, as well as provide for other required large maintenance needs, the Water Board is considering a $10 capital assessment to each homeowner's monthly bill commencing in January 2014. This will raise just under $50,000 per year and enable us to systematically plan and execute the capital projects which are required to maintain the facilities on an ongoing basis.
The water rate to meet the yearly operating requirements will not be changed in 2014. While the Water Board and Management look to optimize the operating and capital requirements for managing the PBH water operations, it is essential that the yearly operating and longer term maintenance requirements are met through the water revenues. The Board and Management will continue to assess the needs and resources on a yearly basis, and present this to the community during the yearly budget process.
In summary, the mill levy reduction and the capital assessment will result in each homeowner incurring an average net increase of $50.00 per year in water costs. We are proud of the fact that the water supply was not interrupted to PBH residents during the flood, and we will continue on our mission to ensure that we meet the uninterrupted needs of our community on a near and long term basis.
Water Taste / Odor Issues
Many, many of our residents this year noticed that the water had a strange taste and or odor to it. We currently estimate that about 50% of our consumers noticed it. We put out information about the problem and talked with many of you.
To review, the problem was not a health issue, as all of the tasting showed that the water served was as good or better than the standards set by the EPA and the State of Colorado, it was strictly an aesthetic issue. A troublesome one to be sure!
It not only irritated the residents who noticed it, it also bothered the District since normally everyone considers the water here to be quite nice.
All of our investigations indicated that the problem was three fold;
1st – a majority of our water comes from Four Mile Creek and that water was affected by the Four Mile Canyon Fire of 2010 as that fire burned up approximately 40% of that water shed;
2nd – the District’s ability to move water that was “decent” from over there was lost mid July when the heavy rains caused flooding on Four Mile Creek and wiped out the diversion structure, the District could not move any water over to the reservoir. The current schedule is to have a new diversion structure in place by September 26th, 2011 and to begin moving water again once it is completed.
3rd – the weather since mid July has been very dry and hot.
So no fresh water into the reservoir, the water that was in there was heating up excessively, and the water that had been moved since the fire was contributing to the aesthetics of the water. The District consulted with the State Health Dept. and the Denver Water Dept. (they have extensive experience with burn area’s and how it affects the water quality and taste of the water). What we learned is that it drives everyone crazy, the water coming out of the filter plant has no taste or odor issues but gets out into the system and then the phone calls, emails, etc. start! The Denver Water Dept. told us how they experienced the same problems after portions of their water sheds burned up. This phenomenon lasted for several years for them. There is hope it will not last that long for us as the burn area is showing promising signs of new vegetation growth.
Can the District do anything about it economically? So far the District has not been able to find an economical way to address the taste/odor issue. The process that would probably best address this problem would cost in the neighborhood of $350,000.00! For a problem that should get less noticeable each year and be gone within two to four years.
Have we given up? Certainly not, the District is still researching other methods to see if a cost effective solution can be found.
What can an individual do? For most people a simple charcoal filter on the main tap that they use for drinking and cooking will take care of the problem. We have had a few reports of that even that did not eliminate the problem, but most reports have been that it did.
Credit Card Payments
Since we introduced the ability to use credit cards on our website we have seen very limited use even though we had had quite a few requests for this service. The use is so low that this service is costing us instead of being revenue neutral. The District has decided to continue to accept credit cards through the end of the year, but if the use is still low (we are only seeing about a dozen “uses” per month) the District will probably discontinue this service as the cost benefit is not there.
This is the time of year when all special districts begin discussing their budgets for the following year. A proposed budget has been given to the Pine Brook Water District Board and it will be discussed at the November and December Board Meetings. The dates of these meetings are November 10th, and December 8th, the meetings begin at 4:30 pm and are held at the Pine Brook Hills Community Center in our offices. If there are a lot of visitors then the meeting will be moved out into the main meeting room instead of in the office.
Currently the Board is intending to increase the water rates, because of the Districts increased costs. The monthly service charge that everyone pays, whether you use water or not, is planned to increase from the current $29.00 a month to $30.00 a month. Then each of the rate steps will be adjusted. The goal is to generate income over the estimated costs for operations each year, these funds are then put into reserves for capital equipment replacement. Capital equipment replacement is for replacement of pumps that fail, painting of water tanks, vehicle replacement (the current vehicles each have over 130,000 miles on them, one is now 12 years old and the other is almost 9 years old), etc.
The District has seen increased costs for fuel (just like all of you), electrical costs, and general repair costs – especially for repairs of paved roads after a water main break.
The other area that is increasing dramatically is our chemical costs. This is due largely to the new process at the filter plant so that we can continue to meet the all the water quality standards set by the EPA and the State of Colorado. This year we will spend about $15,000.00 (because the new process has only been in use for part of the year), next year we estimate it will cost about $35,000.00 for chemicals.
Copies of the proposed budget can be obtained from the office and of course everyone is welcome to attend the Board meetings.