Big Mesa Mutual Domestic Water Consumers Association

1. Big Mesa Mutual Domestic Water Consumers Association Member Meeting 4/13/13 Association Status

2. Big Mesa Board Training • New Mexico Environmental Department • Drinking Water Bureau DWB • Rural Community Assistance Partnership RCAP

3. Board Training • In Las Vegas last fall: • Sanitary Project Act of 1947 to provide rural communities with safe drinking water through Mutual Domestic Associations • Board Responsibilities “to deliver a reliable supply of safe drinking water now and in the future, while meeting all applicable laws and regulations.” As well as; govern effectively via bylaws and rules, ensure proper system operation & maintenance, ensure proper financial management, and plan for emergencies and the future.

4. Through the State Training and Tools, Your Board Learned; Although the Big Mesa Drinking Water system is currently operating well and providing safe drinking water to it’s members, steps need to be taken to ensure the future longevity (10 to 20 Years hence) of the BMMDWCA.

5. NMED Financial Calculator for Small Water Systems • A tool to create budgets, set reserve funds and conduct rate analysis. The goal is to ensure that your Association’s Revenues exceed all Expenses and needed Reserves (which include Emergency, Capital Improvement, Operating and Debt reserves). • Big Mesa’s Board inserted current financial information, then had the Association’s Accountant verify the calculations and results.

6. Financial Calculator Results

7. Financial Calculator Results • Annual Budget: on a Revenues v. Expenses basis (no current structured Reserve accounts) BMMDWCA had a $20,152 deficit in 2012, and currently expects a $3113.00 deficit in 2013. • Rate & Revenue Work Sheet: currently our Total Annual Expenses are greater than our Total Annual Revenues, so expect additional short falls. • Capital Reserve Calculator: (Emergency, Compactor, Pump & Tank reserves) suggest a needed $6.34 monthly increase in rates just for reserves.

8. Corrective Steps Needed • OVERALL • INCREASE REVENUES AND DECREASE EXPENSES • Decreasing Expenses is not easy to do, ensure “cost efficiency” throughout the reviewed budgetary line items (this step has already been put into motion by your Board and will continue to receive it’s attention). • Increasing Revenues • Short Term: collecting on all additional fees and overdue accounts (which has already been put into motion). • Long Term: rate increases, replacing old meters, decreasing leakage

9. Rate Increase • Big Mesa’s last rate increase was in 2000!!! • What other utility has not had a rate increase (or several of them) in the last 13 years? • What business of any kind has not had a rate increase in the last 13 years? • Similar sized Mutual Domestic Water Suppliers increase rates continually; Northstar every 3 years, Animas ‘09, Springer ‘08, Cimarron every year, Navajo ’10, Carrizozo ‘09.

10. Board Responsibility Your current Board does not want to increase rates out of hand, but as the State’s training and tools have demonstrated to the Board, BMMDWCA needs increased revenues to be a viable utility. The Board believes all members will also come to this realization.

11. Rate Increase Considerations Reasonable Annual Budget (continually reviewed) Continual emphasis on “Cost Efficient” Operations Fair & Well thought out rate Structure

12. Rate Increase • After careful review of our current financial situation and integration of the state’s budgetary and rate calculation tools, your Board proposes a rate increase of 10% or $3.50/month to take effect in our 2014 fiscal year starting June 1st, 2013

13. Thank You • The Board wants to thank you for attending today’s meeting to convey some very important information. Thanks for your valued input as well. • The Board hopes you realize that we are your elected officials, who take our newly understood responsibilities seriously, which results in tough decisions. We Hope we have your support in keeping BMMDWCA a viable and safe utility well into the future!