BOARD00978

• Board Meeting Date: 11/23/1998
• Description: CF Section - Status Reports on Loan Projects - Pinon Mesa Ranches - Raw Water Pipeline Project
• Board Meetings - Doc Type: Memo

,

Pinon Mesa Ranches Community Assoc.
Kelley Calder- Financial Officer
3310 EdgecliffDr.
Farmington, NM., 87402

RECEIVED
O~T 0 8 1998

e

October 5, 1998

eoColorado Water
nSe""'lion Board

State of Colorado C. W.C.B.
Attn.: Mike Serlet P.E.
1313 Sherman St. Room 721
Denver CO, 80203

e

Dear Mr. Serlet:

As you were informed, PMRCA held a meeting of its newly elected officers September 28,1998. We discussed the
impasse in which PMRCA finds itself with RMI, the contracted agent who is providing services on a water
project. PMRCA officers agteed to ask the State of Colorado, who has loaned moneys for the water project to
PMRCA to please direct .my inquiries it may have to PMRCA directly. PMRCA' s authority, right and legal
obligation with the contractor is being undermined by the State of Colorado. PMRCA appreciate the States
committnent to help its residents obtain the resources to bring much needed water to our homes. PMRCA has
agreed to repay the funds under the State of Colorado's terms and has every intention in doing so. PMRCA is in
compliance with the loan agreement to my knowledge.

PMRCA feels it is our duty and legal right to dispute billing RMI has requested payment for. Hold accountable
RMI's less than acceptable job performance. There are numerous issues of dispute with RMI: Work ethic,
performance, improper billing and illegal taxing to name but a few. PMRCA as oftoday's date has sent a formal
dispute to RMI demanding equitable resolution to these topics by October 19, 1998.

However, if the dispute has not been reconciled to PMRCA's satist3ction we have a duty and obligation to the State
of Colorado, tax payers and PMRCA members, to file suit against RMI for breech of contract. Such suit would
involve the Attorney General, District Attorneys, Federal and State Taxation and Revenue bodies, private
Attorney's of which will be interested in participation, CClnversation, business and affiliation between PMRCA and
RMI.

PMRCA has determined that the Reverse Osmosis is not a viable solution at this time. PMRCA feels that the State
of Colorado is requesting, and / or demanding new three way agreements with RMI in which it would be unethical
if not illegal for the State of Colorado to participate. PMRCA officers do not believe Reverse Osmosis would be
beneficial at this time. RMI proposed to loan PMRCA money initially at eight percent interest (8% ). Yet the
actual numbers submitted were figured at fifteen percent (15%) interest. Cost of the R.O. system is extremely
inflated, not to mention all the money PMRCA has paid and borrowed to install the water system. PMRCA is
paid one cent per gallon and RMI sells it back to us and others at twelve cents. This agreement would also require
a new loan agreement with the State for ten years instead of thirty. Quit frankly as the financial officer I cannot in
good t3ith recommend such a proposition and will sternly oppose any change at this time.

PMRCA truly hopes that a resolution can be obtained with RMI and the construction phase of the water project can
be finished by November 30, 1998. However, the unwillingness so filr demonstrated by RMI does not look
promising to a quick and equitable resolution and PMRCA is positioning itselffor legal resolution. If! can be of
any assistance, please feel free to call me at my place of employment (business card enclosed).

Sincerely,
. /I
~r~;~ C1L~~L~
_ KyHeyYi!lder
., FinanCial Officer

~w.a~eltyleYAd' Calder
.,an mlnlstrator

!ln~pendenl Ylo~lho/ 0yslems Jnc,

4100 W. Piedras
Farmington, New Mexico
USA, 87401
Tel: [phone] Fax: [phone]

. '. .. .:I1~.'. dl\'-.. ':I:l