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BWSD 2019 AUP reported cause



UPDATE ON NMED LOANS 04.16.20

I met with Judi Kahl, Construction Programs Bureau Chief and Financial Manager Rhonda Holderman this morning Thursday, April 16th at 9 AM.  Below is a summary of the meeting.

 

Judi stated she will look back at the financial package presented which listed the NMFA loan obligation.  Nonetheless, it comes down to the fact that BWSD is not in a position to take on other loans unless we can provide documentation that the District can meet the loan obligation. NMED’s decision is based on the Agreed Upon Procedures filed with DFA for FY ending 2017 and 2018.  If you recall, BWSD’s cash reserves have decreased by $36,000 between June 2016 and December 2019.  This is the sole reason that NMED is considering pulling the loan opportunity.  It is NMED’s responsibility as a lender to ensure BWSD and other entities have the funds to pay back their loans.

 

The Construction Bureau will extend the deadline for the plan another 30 days to allow the Board of Directors to understand the current financial state of the District and determine if BWSD has the capacity to meet the loan obligation. In order to meet the deadline and present a plan for the BWSD Board to consider and approve, the BWSD data should be delivered to me on or before the 21st of April.

 

Judi Kahl sits on the NMFA Board and stated that they do not have the ability to forgive loans.  NMFA is a lender and they obtain funds from USDA.  Not any different than Farm Credit and other USDA lending organizations.  USDA does not forgive loans.  Please remember that you received $905,234 in grants (free money) and the chances of forgiving the remaining $287,000 balance is probably not going to happen. It is unclear as to why State Representative Herrera (she meant Hairy Garcia) seem to think that NMFA could forgive BWSD’s loan.  Despite this news, I will schedule a call with NMFA and invite Board members who are interested in participating and/or listening in on the meeting.

 

I asked about the possibility to extend the loans another six months should BWSD need a bit more time to position itself to meet the loan obligations. The answer was an immediate no.  There are other organizations that can use the funds and they have extended the BWSD loans long enough. 

 

Judy Kahl was clear and extremely firm that there is no wiggle room for BWSD.  The BWSD Board of Directors must decide to be united in their efforts to do everything  possible to obtain $1,570,000 in grants (free money) and $142,069 in loans to finish up the WWTP which will serve current and future Bluewater residents and their families for years to come. 

 

If we cannot  work together on behalf of the BWSD community, let’s not waste the District’s time and money.  NMED is not new to small town politics and at this point, they have no patience for an unstable Board of Directors. They expect BWSD Board of Directors to step up or step away.  If the Board cannot agree to work together as a united group, you will not complete the WWTP Project.  It’s better to decide now before you spend any more funds that the District may or may not have.

 

As for me, my hope is to complete the WWTP Project and create SOP’s by December 31, 2020 and be done with my work with BWSD. 

 

If the Board chooses to move forward, it may require more meetings to ensure we are moving and making decisions as a united group. Please know, there may be much sacrifice on the Board’s part and may require volunteer work for a few months to build up cash reserves.  I’m also willing to provide work at no charge but I am not willing do it if the Board cannot come together and make and approve decisions as a group.

Diane

From: Diane Nunez <Diane@dnunez.org> 

Sent: Wednesday, April 15, 2020 9:22 PM

Subject: Re: UPDATE ON Project Plan

 

All,

Judi Kahl Bureau Chief and Rhonda Holderman Financial Manager have  scheduled a conference call Thursday at 9 am with me to respond to my questions.  They have been incredibly responsive by reaching out via email and text.

I'll report back after the meeting. 


I also have a conference call with NMFA to ensure the survey has been received and to make a couple  of revisions.   They are also happy to make themselves available for questions.

Diane


Sent: Tuesday, April 14, 2020 6:16 PM

Subject: Project Plan

 

Hello,

Beginning April 15th, I will begin work on the following:

 

Reach out to Judy Kahl via phone Wednesday April 15th at the Construction Bureau about the plan due to NMED CPB by May 2020 outlining the steps the System intends to improve debt capacity and ensure the ability to repay the CWSRF 079 Loan dn the RIP 00018 Loan.  Items to address over the phone:            

Discuss the fact that three years of financials were presented as part of the loan package requirement which included the NMFA Loan Balance for two of those three years.  BWSD did not have a loan with NMFA the first of the three years.

Request for the Loan Ordinance and Attorney Opinion on file providing proof that BWSD did not disclose the loan.  SEE EMAIL DATED 041620

Request a month extension to allow me to review the financials for accuracy, analyze financial to determine where the District stands. SEE EMAIL DATED 041620

The plan will be based on the financial standing of the District. SEE MAIL COMPELTED 041620

Propose plan and present to the Board for approval.

REACHED OUT TO JUDY KAHL TODAY 04.15.20 AND LEFT A VOICE MAIL MESSAGE FOR A CALL BACK.  COLLECTED DATA TO PRESENT OUR CASE REGARDING THE ALLEGATION THAT BWSD DID NOT DISCLOSE THE NMFA LOAN. BOTH THE DFA REPORTS FOR 2016 AND 2017 LIST THE NMFA LOAN.  IN ADDITION, BWSD WAS REQUIRED TO SUBMIT BALANCE SHEETS FOR 2015 THROUGH 2017 WHICH LIST THE NMFA LOAN.   

Report to the Board on the financial standing of the District and provide details on how and where and why expense items exceeded budget items (if any).  Revenue will also be analyzed to determine if collections from BWSD customers are in line with the budget.  I will report both last year and the current year’s data.

Complete and submit the questionnaire for 2020 Severance Tax Bonds/Notes and ensure the data reconciles with the data submitted to the State Legislature and ICIP database. Response is due Friday the 17th.  SUBMITTED TODAY AT APPROXIMATELY 4:45 PM AND EMAILED ASHLEY LEACH AT NMFA TO CONFIRM RECEIPT.  WITH THE CAPITAL OUTLAY FUNDING, THE GAP FOR THE ADDITIONAL FUNDING HAS DECREASED FROM $449,737 TO $223,737.   BTW, I THOUGHT THE QUESTIONNAIRE WAS DUE FRIDAY BUT IT WAS DUE TODAY. BWSD MET THE DEADLINE.

Approach NMFA for loan forgiveness ASAP. NMFA IS BUSY WITH THE QUESTIONNAIRE DEADLINE FOR FRIDAY.  I’LL REACH OUT TOMORROW TO NMFA ABOUT SETTING UP A TIME TO DISCUSS LOAN FORGIVNESS BUT I DO NOT EXPECT TO HEAR FROM THEM UNTIL NEXT WEEK.

Generate DFA Financial Data/Reporting for:

3rd QTR

Preliminary Budget for FY 2020-2021

Final Budget

Prepare the resolutions for the Board’s approval

Start on ICIP Submission for future capital outlay funding.

Reach out to Wells Fargo and request a Business Manager be assigned to BWSD to assist with banking needs.

Process payments to BWSD vendors.

Start on the Standard Operating Procedures (SOPs) manual for financial, administrative and construction/loan/fundraising.

Anything else that comes up that will move BWSD forward.

 

If you have any questions and or comments or you believe I missed something, please let me know.

Thank you,

Diane

 

 

           

 

Diane M. Nunez

DMG Enterprises, Inc.

Cell 505.699.2056


Paul and Patty,

I’ve reached out to TAK Technology about billing and waiting for a response.

 

The CPA that worked for me is not interested so I called a women that I helped hire for a company out of LA.  She lives in California and works out of her home.

She charges $35 per hour and is one of the smartest people I know. She is fast, efficient and accurate and  interested in working with BWSD.  She hit the ground running and immediately made improvements for the LA organization.

 

If we proceed, BWSD can distribute an announcement requesting resumes and the Board can interview anyone who applies and go from there. We can do this with all the positions.  Although announcing the job is not required, it shows transparency and gives everyone an opportunity to apply and be hired based on their skill set.  Districts have to go out for RFP if they are spending more than $60,000. No contractor will be paid more than $60,000.   Who knows, someone in the area may pop up and be just as qualified as the accountant out of LA.

 

Diane

 

From: Diane Nunez 

Sent: Wednesday, April 22, 2020 12:50 PM

Subject: RE: Possible Plan to Save the Loan

 

I think it’s a great idea. It’s important to ensure that they can communicate by email.  If they cannot, they will need to identify someone who can assist them in timely manner.  Not sure if people really need to know how to operate a wwtp and/or water system but they should be able to receive an invoice from the contractor, be familiar with the contractor’s contract, answer questions from the board and report to the board on the activity for the month.  It’s really about using the contract as a guide and physically checking to see that the work is happening. As for billing, accounting, it comes down to the contract and reviewing the accounting financials and billing reports.  The accountant should provide a narrative which will make it much easier. 

dn

 

Sent: Wednesday, April 22, 2020 12:41 PM

To: Diane Nunez <Diane@dnunez.org>

Subject: Re: Possible Plan to Save the Loan

 

Thank you Diane.

 

Patty I think we should construct a letter to distribute around the village bringing to their attention that BWSD is in need of 3 board members who would be willing to fallow this plan in hopes that we can retain funding .  What are your thought?


Sent from my iPhone

 


On Apr 22, 2020, at 12:25 PM, Diane Nunez <Diane@dnunez.org> wrote:




Paul and Patty,

If you can build your board up in the next week or so and stabilize the water and wwtp operator, we may be able to save the wwtp loan.  I just received an email from Rhonda Holderman form NMED CPB that may give us a window for debt capacity.

 

I would propose a restructure that I’ve had experience with in cutting costs and ensuring accountability for everyone on the board and contractors. This is how highly functioning and successful systems operate.

 

Utility Director (20 hrs/month) – Organize and oversee day-to-day operations (funding, financials, operations -water, wwtp and refuse) ensuring everyone is on the same page.   Utility Director would be supervised by Board President and approve invoice prior to forwarding to the accountant and the board members.  Board members would have a period of time to present any questions.

Water Operator–(Set Fee for monthly work except for emergency repairs which is a set hourly fee) -  Daily and emergency services for the water system. Water Operator would be managed by a Board Member.  Monthly update from Board Member.

WWTP Operator (Set Fee except for emergency repairs which is a set hourly fee)  – Daily and emergency services for the wwtp.  WWTP Operator would be managed by a Board Member and approve invoice prior to forwarding to the accountant and the board members.  Board members would have a period of time to present any questions. Monthly update from Board Member.

Refuse Operator-( Minimal hours per month maybe 1 to 2 hours per month Set Fee or Board Member Volunteer) – Monthly Report to Board.

Accountant – 15 hours per month and any special project would be approved by the board.  Cost $30-$40 per month.  Accountant would be managed by a Board Member.  Monthly financials presented to the Board by the Board Member. I know someone who may be interested. She lives in Placitas and is a CPA and knows BWSD financials.

Secretary – Volunteer Board Member or hire someone to take minutes and prepare agenda.  If you hire someone, set price for picking up mail and preparing agenda. Pay $10 per hour for board minutes + set price for finalizing and distributing minutes. Managed by Utility Director and indirectly by President.

Billing – Outside Contract – TAK Technology who produces Qwater can take over billing.  BWSD Board of Directors approved transitioning to Qwater years ago (I can find the minutes).  TAK would report to a Board Member.  This would significantly decrease the costs associated with the community center and avoid any conflict of interest.  I will reach out and ask for a price.

 

Some board members will volunteer their time with the operator to work with the operator during emergency repairs. 

 

 

Diane

 

Diane M. Nunez

DMG Enterprises, Inc.

Cell 505.699.2056

 

 


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