SOUTH FORK— The South Fork Town Board held a meeting on Tuesday, May 28 to discuss the current water system and funding options for the project. Among many things on the agenda, Resolution 19-09 was by far the most important. Town Administrator Dan Hicks opened the conversation by reading directly from the packet of information provided to the board, which is available online at: www.colorado.gov/pacific/southfork/boards for the public to review.
“I will begin by reading the cover sheet that explains the resolution and then we will have our town attorney, Gene Farish, read the resolution into the record before we have a motion and discussion,” explained Hicks.
He continued by reading the following, “The Town of South Fork Board of Trustees, in recognition of the deficiencies and inadequacies of many of the existing town private water systems and the water services these private systems provide, contracted with Davis Engineering Services, Inc. to develop a Preliminary Engineering Report (PER) for a municipal water system on June 18, 2018. Since that time the town staff has completed many sequential steps to obtain funds to pay for the design and engineer of the municipal water system. The result of this effort is the Town receiving a $300,000 D & E grant from the Colorado Water Resources and Power Authority in the form of a principal forgiveness loan. Resolution 2019 – 09 is the acceptance and approval of the agreement for the $300,000 principal
The agreement covers funding 80 percent of the total D&E costs, with the Town responsible for the other 20 percent. The Town will fund the 20 percent through a loan/transfer from the General Fund to the Water Enterprise Fund. The Water Enterprise will seek funding, through loans and grants, for the total implementation of the municipal water system. At that time Water Enterprise will also borrow enough funds to pay back the General Fund for the 20 percent D&E loan.
The loan for the total municipal water system will be a long-term loan and this loan will be repaid by the Water Enterprise through water rates paid by water users. Therefore, the fiscal impact to the Town will be minimal. The maximum amount of funds through transfer/loan from the General Fund to the Water Enterprise Fund represented by the 20 percent is $75,000. The time between beginning of the D&E expenditures and Water Enterprise receiving total implementation loan and then able to pay back the General Fund is estimated to be approximately one year or less.
D&E will begin in June 2019. Each invoice generated by the town engineer to the Water Enterprise for D&E will be submitted for payment to the state agency administrating the Agreement. The state agency will pay 80 percent of each of these invoices. The Water Enterprise will pay the remaining 20 percent of the invoice. Each month staff will transfer funds from the General Fund to the Water Enterprise Fund for the 20 percent invoice payments. At the June 2019 meeting of the board, a resolution will be introduced authorizing the funding transfers between the General Fund and the Water Enterprise Fund for D&E invoice payments and approve any related impacts to the 2019 budget.”
Once Hicks was done reading the overview, Farish read Resolution 19-09 and Mayor Rodney Reed asked for a motion, which was moved and seconded before he opened the floor for discussion.
Trustee Jim Patterson was the only one with a question pertaining to the chances of whether or not the town would receive the loan, to which Hicks explained that the town passing the resolution was one of the final steps.
“What exactly is the 20 percent that we will have to come up with and what are the chances that we will not be approved for the loan?” asked Patterson.
Hicks responded by stating, “Well this resolution is part of the final steps in getting the loan. From my understanding and from what I am being told, everything after this step is fairly easy. As far as the 20 percent that we are required to come up with, it basically calculates out to $60,000, but we decided to put in $75,000 to be on the safe side. It is reimbursed at the time that the invoice is executed, and the loan is approved so there will be very minimal fiscal impact for the Town if all goes well.”
Mayor Reed asked for a roll call vote and Resolution 19-09 passed unanimously.