Special Informational Meeting Concerning Acquisition of the Water Company Q and A

Saturday, February 21, 2004


Question and Answer Period: with Anne Casperson fielding questions

Roz Glasser; I want to first encourage folks to give these people a round of applause. I know it was a lot of work.

Roz: Skagit County has told me that a person could build on a sub-standard lot because they were vested.

Sharon: If it was previously plotted you can. What I was talking about was the difficulty of selling off contiguous lots, if they don't meet current standards.

Roz: So, if you have a lot, that's say, an acre, and 2.5 acres is the minimum lot size, you can't sell off a half acre of that lot?

Sue Wintermantel: Each situation is so individual, that you really need to contact the county and ask them about your specific situation.

Mark Spahr: For the people that have 3 or 4 lots. For example, Let's say that I live in the middle and I bought one lot for one child and another lot for another child but they're all in my name. Can I sell those off now? For my sons to build there? Probably not, because in effect, I would be creating sub-standard lots. But, if you have a sub-standard lot now, and it meets the perk, and the reserve drain field, and the set-backs, you can build.

Anne Casperson: I'd like to read the questions that Bob Easton sent us in advance, First, How much have we spent on attorney fees and this whole process? Virtually all that was in the HHA account, which we intend to pay back.

Bob: Who will the water company manager report to?

Anne: He will report to the board. A special committee may be considered in the future.We need some time to decide, how, or if we need to restructure.

Bob: Who would be liable if the water company defaulted on the loan?

Anne: The water users will pay for the loan. The plan is to double the surcharge from $5 to $10 to cover the payment of the loan. That will be enough to cover the loan.

Bob: How many water rights will belong to the association? There was talk that we would have some income from the sale of water shares.

Anne: There will be a minimum of 22 water shares (possibly 24) transferred at the time of the sale. Our intention isn't to sell those until we really know how the system is going to work. The idea is to serve everyone who has a water share and make sure that all those people are taken care of.

Gary Chelin: I think my question has been answered, I was concerned because everyone in the Holiday Hideaway Assoc is not a water user. Are you going to set up a separate entity?

Anne: The bank accounts will be separate. The money won't be co-mingled. But for now, it will be under the umbrella of the association. We may, after some time, feel that it makes sense to separate the two entities with separate by-laws, name, etc.

Roz Glasser: Are we required to have a reserve for long term maintenance, by law? Mark: There's no legal requirement.

Roz: Hal mentioned that there were members who were willing to make a loan if there was an emergency. I'm wondering if we should be more pro-active and have an extra monthly fee to be set aside for maintenance, that could be earning interest for us. Anne: That is certainly something that we could think about.

Bill Rainwater: The first years the water at our home was pretty good, no strong sulfur smell. The last 3-4 years it has really gone downhill. The Guemes Island Water Company has told me that our water was coming from the wells down by the boat dock and there wasn't much that they could do. My question to Mark, Is that something, that under your management, you could change?

Mark: There are 4 wells that are active and the management system, (the control system) allows some flexibility in how the pumping is rotated from one well to the other. However, the problem is the concern over salt water intrusion. There are restrictions on how much water (the rate) that you can pump from any one well. If the water level goes down to within half a foot above sea level the alarm goes off or the pump turns off to prevent salt water intrusion. We have to pump all the wells a little bit, especially in the summer (when the demand is higher.) Another thing that I want to do is look into, and possibly clean out, are the water tanks. I assume there is an accumulation of manganese and iron that has oxidized and settled out and could be contributing to the taste and odor. I will be looking into that.

Houston (Lyn Daniels' husband): Why are we talking about taking this on, vs. letting the county do it? And does this thing have a price tag up front?

Sharon: $10 is the acquisition cost. (Hal: The other cost is that we are assuming the liability of the loan which is $200,000)

Sharon: We are taking it on for all the reasons that Mark cited, saving ourselves money, replacing pipes as needed, instead of all at once, etc. We expect to have just as good a quality of water. The other thing is the growth factor. The PUD has a policy of making water available, at a huge cost to all of us, to many more people, which would change the quality of life here.

Roz Glasser: About the long term replacement process, I'm not quite clear, the loan paid for capital improvements to existing facilities and you're talking about a separate plan for replacement of the system. Can you give us an idea of the cost?

Mark: I don't know off the top of my head. There's about 3 miles of pipe and at about $40-$45/foot. If the PUD was doing it their philosophy is, "build it so you never see it again." That would about double the price. They would issue bonds and you would pay the interest. Our plan is to do it as we can afford it.

Roz: That brings me to an earlier point, that we might want to get together and support another $100,000 of improvements.

Hal: In our estimated budget there is $2,500/month or $30,000/year. We think that will cover the improvements. If we do it in phases with a project every 3-4 years. (I don't know how many 3-4 yr periods we'll need.)

Mark: Another issue is that by 2017 the current GIWC water rights require that a 100,000 gallon tank be constructed. That was proposed to be done with the state loan but they ran out of money. The piping was done, the land acquired, the adjacent building is set up for it. We'll need money for that tank by 2017. But Hal mentioned that the loan payment ($23,000 this year) gets smaller every year. By 2017 it is zero, so if we use the money collected with the surcharge we should be able to accumulate the money for that tank.

Dana Bettinger: Have you looked at refinancing the existing loan?

Mark: I asked that question, but they said no, you can't refinance it.

Bill Rainwater: The water hookups that are going to be transferred to Square Harbor Development in exchange for the water company. Are those going to be set up as "Stand-by" water shares and will they be paying the same fees as everyone else?

Anne: They will each be assigned a property, and yes they will be paying the same fee as everyone else.

Bob Easton: About the two lots that the wells are on. Will those now belong to the association?

Ann: The property will belong to us.

Gary Chelin: Have you given thought to a one time assessment of $100 or something for operating capital?

Anne: Yes, we have talked about that. But we want to see what happens. If it doesn't work we'll have to take other measures.

Anne: We thank you all for coming. This has been a great experience working with these people. We've put in a lot of work. It's been challenging. We really think that this can work and we hope that you will address us with your concerns. We want to people to be served and to provide good water and we are confident that we can do that.


 
Tags: HHA Holiday Hideaway 2004
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