Monday, October 18, 2010

Rim Country Water group bashes Haney, Jones

Fair price for Milk Ranch 'about $250-300 K' 

(The following update is provided by Water for Pine Strawberry, headed by the gentleman we dare not mention lest the Roundup stop printing his letters to the editor for associating his name with us.  Hey guys: it's supposed to be about providing both sides of the story to your readers.  Competition is a good thing.) 

Next regular Pine Strawberry Water Improvement District (PSWID) Board Meeting: Thursday Oct. 21, 2010 at 7:30 PM at the Pine Cultural Center

As you may recall, on Sept. 1 the board cancelled the scheduled Sept. 16th meeting because they didn’t have anything they wanted to talk about. Rim Country Water (RCW) did hold a meeting on Sept. 18, where Mr. Gary Lovetro and Mr. Mike Greer found plenty of new information about the RFP for an operations company, bank financing, and problems with the Milk Ranch well to tell that group. It appears that the public meeting was cancelled to not conflict with the Rim Country Water meeting, but perhaps that is just a coincidence.

For those of you who are newer to water issues, RCW is the group that initiated the takeover of the PSWID board in March 2008 through the recall of four of the prior board’s members. They had the goal of blocking the K2 well and purchasing the water companies. Mr. Greer and Mr. Ron Calderon were two of their candidates in the recall and they are running for re-election on Nov. 2.

Two intrepid members of the Water For Pine Strawberry group attended the meeting and recorded it. I am working from that recording. For the most part it focused on bashing Mr. Bill Haney, the former chairman of PSWID, and Mr. Harry Jones, former interim District Manager, and pumping up Mr. Greer and Mr. Calderon for reelection. Normally, I wouldn’t spend time on what goes on in their meetings, but a couple of things stated during the meeting I think are useful to address.

Milk Ranch Well numbers vary
Mr. Lovetro claimed that the total cost of the Milk Ranch well would be $650,000.  In the meeting Mr. Lovetro said that the Milk Ranch well could have hookup and filtration for $150,000 instead of the $429,000 that Tetra Tech estimated and that the Milk Ranch well would have a total cost of $650,000.
The cost of the Milk Ranch well, using Mr. Lovetro’s reduced connection number is $840,000. Using Tetra Tech’s estimate it is $1,119,000. The actual cost is likely to be somewhere in between those two numbers.
i. Spent to repair well: $120,000
ii. Cash for Purchase: $400,000
iii. Free Meters for Purchase: $170,000
iv. Connection cost: $150,000
v. Total: $840,000

Comparison of K2 versus current well purchases
The basics of the K2 agreement would have been:
i. PSWID would provide $300,000 for a test deep aquifer well at the K2 site.
ii. If the test well showed production of 150 gpm or better, Brooke would repay the $300,000 at 6% interest and invest in a production well at the site.
iii. If 150 gpm was not achieved, PSWID would own the well and be free to enter into a water sharing agreement.
iv. Extensive hydrological analysis and underground imaging showed a high potential for the well’s production.
v. If the well was successful, Brooke would have gone to the ACC for a rate increase for water users in Pine to cover the expenses of drilling, developing, and connecting the well into the water system.

The argument being made by the current board is that they are getting two wells for $1.29 million (Mr. Lovetro said $1.1 million in the meeting, but I am correcting his math) and that that compares favorably to the K2 well.

While it is a dead issue, since it is being brought up and we are being questioned about why we supported K2 in the past, the following are our main reasons:
i. K2 did not require spending $5 million to purchase the water companies.
ii. K2 would have delivered the new water for the summer of 2008. We are still waiting for new water.
iii. K2 is situated where it can easily deliver water to either Pine or Strawberry. It is not economical for wells in Pine to supply water to Strawberry because it has to be pumped uphill.
iv. K2 connection costs are minimal since it is adjacent to storage tanks and the Magnolia pipeline. Milk Ranch well connection will be very costly.
v. The people of Pine, who have the water problem, would have paid for its solution. Now the water users in Strawberry and property owners in both communities have to pay for the solution.
vi. We wanted the problems with water supply solved as quickly as possible and for the least cost. In our view the K2 well met that criteria. The opposition to K2 and the push to buy the water companies was to satisfy other agendas held by people in the community. They viewed K2 as a threat because it would have taken away the leverage that the water shortages provided for pursuing that agenda. We weren’t the only ones to see that agenda. As the ACC legal staff wrote in a February 29, 2008 legal brief: “The arguments that are being advanced against the [K2] agreement are to the benefit of a small group of developers, and against the overwhelming need of the public for more water.”

Why is $120,000 spent on Milk Ranch Well different from $300,000 for K2 well?
The $300,000 would have either been recovered by the district, with interest, or the district would have ended up owning a well and it could then make the water available to the community.

The $120,000 is being used to take a well that was not functional and repair and improve it. The community is then being asked to pay more than full price for the improved well, without any accounting for the fact that the community paid to fix it. It defies common sense. You would not pay to have an engine replaced in a car before you buy it and then pay the owner full blue book value for it.

Comment: I would venture a guess that none of the board members would spend their own money this way. They seem to be fine with spending their neighbor’s money this way.

It is deeply hypocritical on the part of the board members. RCW and the board members associated with RCW would get red in the face yelling at the prior board about how inappropriate it was to spend public money to the benefit of a private entity. However, when that private entity is their patron, then they are all for it.

Comment: So what would be a fair price for the Milk Ranch well? There is no perfect formula. There are things to weigh such as what the connection costs will be, the quality of the water, the physical structure of the well, the age of the well, and property and access associated with the well. The Milk Ranch and Strawberry Hollow wells are physically pretty similar, so using $450,000 for the Strawberry Hollow well as a starting point, and then subtracting the repair and improvements paid for by the community, plus a portion of the higher connection costs required by the Milk Ranch well, a price of $250,000 to $300,000, without the free meters, would appear to be appropriate.

Misinformation in Press and on Websites
For the past three years, every couple of months Mr. Ray Pugel or one of his surrogates will complain about how our website contains misinformation. Yet in all this time, they have yet to specifically identify anything that is incorrect. When asked at the meeting to name something specific, they changed the subject.

Comment: We make every effort to get the facts on the website and in these updates correct. We occasionally make mistakes and identify the corrections as soon as we are aware of them in the emails. We try to clearly indicate where we are giving our conclusions. Personally, I think that they are confused on the difference between facts, conclusions, and beliefs. The bottom line motivation is that they don’t want the community to hear any information that they don’t control.

This update is from the group Water For Pine Strawberry. We will be sending out an update after each PSWID board meeting with a summary of what the board did, additional facts that are relevant to what went on, and some commentary. Updates on earlier meetings are available on our website: .

Water For Pine Strawberry is a group of residents who are concerned about the communities water issues and how they can best be resolved. Visit our web site,, for more information. The website for PSWID is .

Clarifications can be submitted by anyone who is explicitly named, implicitly identifiable, or a board member to items in this update. Clarifications will be posted on our website. We reserve the right to post a response. Clarifications must deal with the topics discussed in the update that relate to the individual or the board. They must be in family friendly language and be non-abusive. When the clarification is accepted, it will be posted to the website and notice of that posting will be added to the next update.

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