Proposal with water and san district heading to Meridian Lake

Broad analysis being done to consider pros and cons

[  By Mark Reaman  ]

The next move in redefining and making the relationship between the Mt. Crested Butte Water and Sanitation District (MCBWSD) and the Meridian Lake Park Corporation (MLPC) clearer has been set in motion. The MCBWSD board of directors last week agreed to send a draft agreement to the MLPC for consideration that would replace the current governing Memorandum of Agreement (MOA). An analysis of financial and other expected ramifications of the proposal will also be prepared for the district board and public. 

The draft proposes to eliminate the MOA signed originally in 1995 that both entities consider to be too vague and set up a path where Meridian Lake property owners would pay a monthly surcharge for the next six years (currently set at $36.27) and then pay the same rate and fees as all other property owners in the district. The seven-page draft makes clear the parties agree that the MOA is obsolete and outdated and that it is now appropriate to terminate the MOA and sunset the Meridian Lake surcharge over time. After six years, customers within Meridian Lake Park would pay the same taxes, fees, rates, tolls and charges to the district as all other customers within the district.  

The MCBWSD board will also prepare what it being called an extensive pro forma to analyze the immediate and future financial ramifications of the new proposed agreement. A 2019 study determined that the overall district had been significantly subsidizing rates paid by MLPC residents for water and sanitation services to the tune of millions of dollars since the MOA was implemented in 1995. But the MLPC board was not totally on board with the conclusions of the 2019 study.

MCBWSD board member Nicholas Kempin argued during the February 8 board meeting that adequate time should be taken to understand the draft proposal and perhaps address more future details concerning infrastructure as well as anything else that should be included in a settlement.

“I think we need more outreach to the community and we should hold a special meeting on this topic,” Kempin suggested. “Whatever we do, it should be fair for everyone in the district.”

He noted that the MCBWSD Water Committee that worked on this issue had as its goal a resolution that would be fair and could be defended to any customer in the district, whether they reside in Meridian Lake Park or Mt. Crested Butte. He said the pro-forma that is being undertaken could be used as additional information for negotiations, to assure fairness, and provide a defensible basis for any agreement. 

Board chairperson Brian Brown said the discussions have been ongoing for years and been open to the public. He also noted regular updates on negotiations between MCBWSD and MLPC have been given at the district’s regular public meetings. “That being said, I’m not opposed to more public meetings,” he said. “I just don’t want to hold up progress on this.”

“I too want to see this continue forward,” said board member Nancy Woolf. “I’m hearing delay, delay, delay. Having a new agreement is in everyone’s best interest and I think it is time to send this proposal to MLPC as a draft for comment. Keep it moving forward. We know the finances of the proposal so I don’t want to just sit on this. I also don’t see a reason to solve everything in one fell swoop. This gets the MOA issue solved.”

“I also want to keep it moving forward,” said Kempin. “We’ve been working on this for years so I think taking another month to look at it closer is appropriate. It should go through a deliberative process.”

“We still have a lot of details to work out before a vote,” said Brown. “But the tone is set for a direction forward and the draft guides us to that path. I’m in favor of sending this to Meridian Lake Park and getting their response. We could perhaps talk about it at a special meeting after that. Getting it to them is step one.”

Kempin insisted on a financial pro forma being compiled and there was lengthy discussion about how a strictly numbers approach could show an incomplete picture of the benefits of the proposal. The board eventually agreed that a broad financial and overall analysis that takes into account more than just rate discrepancies was appropriate. 

Brown said a standard pro forma would not do a good job of explaining the nuance of the agreement and future benefits of a reworked agreement. “It could paint a picture that is not realistic,” he said. 

Ultimately, the board insisted that a broader analysis be compiled and that should include a cost of legal uncertainty and the possibility of future litigation. Things like the Meridian Lake property owner’s contribution to infrastructure improvements like the new water treatment facility should be included too. The idea is to basically consider as many pros and cons of the agreement as possible and Kempin said a pro forma is one part of the overall analysis that needs to be done before any official agreement is signed.

“We have a starting point with the draft,” concluded Brown. “The final agreement could be significantly different than what we see today but we all agree it is time to move forward and replace the MOA document with a better agreement. This is a good start.”

No date has yet been set for a special meeting.

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