Rolling Hills Citizens Association Minutes of the January 19, 2017 Association Meeting Valley Children s Hospital Room 150B The meeting was called to order at 7:10 by RHCA President Eric Olsen. He introduced Karen Petryna, Board President of South East Madera County United (SEMCU.) Karen presented information about their organization. She also informed us of a grant they received to distribute Low-Flow water fixtures within the South-East part of Madera County. Residents of Rolling Hills are eligible to receive the hardware! She brought a stack of Requisition Forms for us to fill out and bring to our Fire Station. SEMCU volunteers will have the water fixtures at our Rolling Hills Fire Station this Saturday, January 21, from 9-11 am and again on Saturday, January 28, from 1-3 pm. RHCA Secretary Chester Goodale announced that, as of tonight s meeting, the paid memberships in the RHCA numbered 96. He reported that 20 members would establish a quorum, and declared that a quorum was present. Chester then read the minutes from the October 13, 2016 Association Meeting. A motion to approve the minutes was made by Tim Ratcliffe and seconded by Dawn Davies. A voice vote was called for, and the motion passed. RHCA Treasurer Roseann Galvan presented this Financial Report for the 2016 calendar year. Most of the dues for 2016 were paid in October, 2015, and are not listed here. The 2017 Financials will give a more accurate picture, since dues for this year were paid in January. 2016 Rolling Hills Citizen Association Financials Income Dues* $ 350.00 Total Income $ 350.00 Expenses Gift for Ralph Tonseth $ 205.00 Sound System rental- Meeting $ 125.00 Advertising- Yard Sale $ 89.00 Total Expenses $ 419.00 Excess of Expense over Income $ (69.00) Bank Balance 12-31-2016 $3,905.24 *Some of dues were received in 2015 that were used for expenses in 2016. 1
Roseann then presented this Budget for the 2017 calendar year. We will have new expenses related to becoming incorporated, such as fees paid to the CA Secretary of State and the IRS. 2017 RHCA Budget Income Item # Members Income Income 80 $ 2,400.00 Expense Item Amount Secretary of State $ 30.00 IRS 501c.4 filing $ 400.00 Insurance (D&O) $ 700.00 Office Supplies $ 500.00 Contractual Services (CPA for IRS filing, Agent for Service) $ 750.00 Total $ 2,380.00 Reports from RHCA Board Officers -Roseann Galvan The process for incorporation will involve filing papers with the Secretary of State. We then would file as a 501c.4 with the IRS and obtain an employer ID number. -Chester Goodale Membership is higher this year than in years past, which is good news for working together to solve the water issues we face. We have over 200 people on the email list, and our new webpage at www.rollinghillsmadera.org is operational. Thank you, all of you who came tonight, for seeking to be part of the solution. What if this water issue ended up turning our neighborhood into a community of people who know one another! -David Frisby The Board has met every 2 weeks since October to learn about our water system and explore options for moving forward. We met with Kassy Chauhan from the State Water Resources Control Board, Tim Bakman of Bakman Water Company, and Melisa DaSilva from Brett Frazier s staff. We learned that before we could privatize our system its debt of $3.1 million would have to be paid off. (Brett would talk more about this later in the meeting). The Board is diligently working towards the best interest of the community. David reported that he had met with Phil Toler regarding fixing and maintaining our roads, and at a future Association meeting he has an 8-year plan he would like to present that could repave all the roads in our community (similar to what has already been done on Butte Way) for a cost of approximately $11 per lot per 2
month. We could then maintain the roads to prevent them from returning to their present poor conditions. He shared that Roseann has some knowledge and experience working with CalWater, which she can share with us at the next meeting. -Eric Olsen Eric reported that he has obtained the budget info for the last ten years of operations for our water system. During that time the operating expenses have increased more than $100,000 per year, but the revenues have also increased by about $100,000 per year so his calculations don t show us in a deficit. Ten years ago, when we added the well, upgraded the fire hydrants, and added a storage tank, about $1.9 million worth of work was done. Madera County added almost $1.5 million in administrative charges, for a total of $3.4 million. When the debt was sold as bonds additional fees were paid, bringing the principal of the bond to $3.8 million. At 5.699% interest and over a 30 year term we will pay about $7 million for our $1.9 million in improvements. Documents show that when the bonds were created 49 homes paid their full assessed cost up front and 1 home paid off part of their expense. The charges for the rest of the homes became part of a 30 year bond. The Bond will be completely paid off in 2038. If you wished to pay off your share of the debt today it would cost you about $ 7,000 up front, but would save you around $600 per year in taxes over the next 21 years. New Business President Eric Olsen -Vote to approve Third Amendment to the RHCA By-Laws Secretary Goodale read the proposed Third Amendment to the Bylaws, the text of which was printed on the bottom of the meeting s agenda. He explained that an aye vote would approve changing our group from an unincorporated Association to an incorporated non-profit Association. One member questioned if that meant we were becoming a Home Owner s Association, and the answer was no, we would remain a Civic Benefit organization working together for the benefit of our neighborhood. According to our By-Laws, they can only be amended by a majority of the voting power of the Association, which means that tonight s amendment would need an aye vote from at least 49 of our current 96 members to pass. Chester asked for four members to serve as Election Inspectors, and members Georgette Mello, Dawn Davies, David Adamo, and Brian Johnson volunteered. The Inspectors collected the votes, counted them, and reported to Chester that there were 72 votes aye and 1 vote nay. The Amendment passed and will become effective immediately. 3
-Election to fill two Board Member vacancies to a 1-year term President Olsen informed the Association that two of our current Board Members, David Frisby and John Davies, had been appointed as Interim Board Members in October when former board members Jim Weins and Matt Bricker resigned midway through their two-year term. According to our By-Laws, Interim Board members can serve until the next Association Meeting, at which time they are to be either affirmed or replaced by an official election. Eric asked for nominations from the floor for the two open seats on the Board, and David Frisby and John Davies were nominated. There were no other nominations from the floor. Ballots were collected and counted by the Election Inspectors. David Frisby received 72 votes and John Davies received 70 votes. Secretary Goodale announced that they had been duly elected to the RHCA Board. -Vision for the Board President Olsen shared that the Board has three goals. We think that privatizing our water system is our best option in the long term, so our first goal is to work in that direction. Since we have to work with the County in the meantime, our second goal is to maintain the best working relationship with Brett Frazier and the County as we can. Our third goal is to have an active and well-informed membership so that our voice will be heard by the County. -Hear from Brett Frazier Madera County Supervisor Brett Frazier said that he had been working extremely hard on our behalf to come up with solutions for our water system. To privatize our system would require a majority vote from the members of CSA 19 plus approval from both LAFCO and the Madera County Board of Supervisors. [editor s note: LAFCO (an acronym for Local Agency Formation Commission ) is a public agency with county-wide jurisdiction established by State Law (the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000).] The final step to privatize would be paying off the CSA 19 debt, which Frazier said stands at Bond Debt of $2, 915,000, Repair Debt of $183,000, and a General Fund Debt of $69,902, for a total of $3, 167,000. Frazier reported that according to County Treasurer Tracy Kennedy the annual bond payment per house in Rolling Hills is $612 and the annual payment per commercial site is $1,836. Frazier said that to refinance the bond it would have to pass a 3-part test: 1) No term extension 2) Savings every year 3) New amount would be equal to or less than the prior amount 4
Madera County has contracted with Bartle Wells Associates to do a rate study of our water system. [editor s note: Address: 1889 Alcatraz Ave, Berkeley, CA 94703. Quote from the Bartle Wells webpage- Our utility rate and fee studies employ a cost-of-service approach and are designed to support long-term financial stability while being fair to all customers. We have completed over 2,000 utility rate and fee studies and are knowledgeable about the legal requirements governing rates and development impact fees. See www.bartlewells.com ] Any proposed increase in our water rates would be submitted for approval via a 218 election. Frazier introduced Madera County Counsel Scott Cross to explain that process. Cross explained that a 218 Election process does not involve any actual ballots. Rather, a letter announcing the proposed rate changes is mailed to every member of the Service Area, along with a deadline for submitting written protests. Every property that DOES NOT SUBMIT a written protest is counted as being in favor of the rate change. The names of each person who submit a written protest are read aloud and into the record at a Madera County Board of Supervisors meeting, and if a majority of the properties lodge a written protest then the proposed rate change fails. Brett Frazier then announced that the County had met with Richard Gunner to negotiate the possibility of tying our water system into a municipal-grade well that Gunner owns which is situated on Avenue 10 just outside of the Rolling Hills subdivision. Gunner agreed, provided that any water he sells us is not counted against his extraction limit for the well. County engineers will test the well s water quality and do a cost analysis for tying the well into our system. Gunner said he did not want to become a water dealer himself, but wanted a private water company to manage the water sales and distribution. Brett said the County is talking with California Water Service [https://www.calwater.com] about administering our water system. California Water Service would buy our system by paying off the debt and paying for the tie-in costs. They would then submit rates to the Public Utilities Commission (PUC) to operate our system, install water meters, recoup the money used to pay off the debt, and make a guaranteed profit. Frazier then invited Alex Salazar from the Madera Realtors Association to make a presentation about changes in property values in the Rolling Hills area over the past year. According to Salazar, there had been a 4.2% increase in sales prices. An Association member asked a question about our Fire Station, and Mike Surber from Cal Fire came forward to answer the question. -Conclusion of the Meeting After Brett Frazier finished answering questions, President Olsen announced that the intention of the Board was to hold Quarterly Association meetings until our water issues were solved. Member Ethel Pronin made a motion that we hold three Association Meetings per year 5
instead of four. Someone seconded the motion, and President Olsen called for the question. The motion carried by voice vote. Olsen then dismissed the meeting at approximately 9:15 pm. Minutes submitted by Chester Goodale, RHCA Secretary 6