At the Hondius Annual Meeting in 2021, the members voted to increase the base charge for the Hondius system from $500 per year to $1,500 per year and for Hondius to attempt to build up a sort of reserve fund that could be utilized in the future for major repairs or replacements of portions of the Hondius system. In years prior to that, Hondius attempted a plan to replace the system, the history of which is provided below:
At a Hondius Annual meeting on August 1, 2009, led by Ed Hartsook, the possibility of replacing the Hondius water line via a State Revolving Fund (“SRF”) program that would provide a loan funding the project was introduced. The new main line would be buried at sufficient depth to provide year-round water and would also provide fire hydrants which do not exist on the current system.
The Hondius system was shortly thereafter turned over to Frank Huffman as the operator of the system, and, given the lack of an active Hondius Board at that time, little formal activity occurred through the Hondius Water Users Association (“HWUA”); however, certain owners at Wonderview Condos continued to have discussions with Larimer County and State representatives regarding the possibility of a Hondius water system replacement project.
In August 2014, a meeting of Hondius water users was called, and approximately 60 Hondius water users attended the meeting at the Estes Park Museum. At that meeting, the group discussed the need for funding to do a preliminary engineering report (PER), which could be used by the State to determine whether to fund the project. We were also informed by Larimer County that we could obtain a matching grant for the cost of the PER if we could raise half the funds needed to prepare the PER.
The group in attendance unanimously voted to move forward and the money was raised from the Hondius users and we obtained the matching grant and work was commenced on the PER by Landmark Engineering in 2015. Additionally, a project committee of eight individuals was formed to work through the project.
Another public meeting of Hondius water users was held on October 2, 2015, at the Park Village Theatre to discuss the results of the PER. Additionally, owners not currently on the Hondius system, but in the vicinity of the new system main lines, were invited to the meeting. The PER, including the estimated cost of the project, was presented by the Engineer from Landmark Engineering. It was noted that the preliminary design of the replacement system would bring main lines much closer to many of the current Hondius users in an effort to eliminate long service lines that are currently in place, and eliminate shared service lines that would not be allowed by the Town of Estes Park (“Town”) once they take over the system.
New service lines would be the responsibility of the homeowner, but these can be put in at the same time as the main project occurs at a depth sufficient to provide winter water. There were approximately 40-50 people in attendance at the meeting, and at the end of the meeting, the group voted to continue to move forward with the project.
Following the October meeting, we determined a major change in the SRF program occurred in that the loans under the SRF program were no longer made immediately after the PER is completed. Rather, the funding by the SRF would only be made after additional costs would be incurred for detailed engineering work; therefore, using the SRF program would require interim financing (or additional contributions by the owners) to pay for those costs prior to the time when the funding would be available from the SRF.
As a result, we began working with the Town and the United States Department of Agriculture (“USDA”) on a financing alternative, whereby the Town would be the party incurring the debt obligation (including any interim financing required) from the USDA and would repay the loan through its future billings of the Hondius water users, likely over a period of 40 years, the maximum term of loans under the USDA program.
We found that the USDA program is more attractive than the SRF program for several reasons including:
- The maximum repayment period is 40 years (vs. 20 years under the SRF program) with a low interest rate (2.625%). This obviously has the effect of reducing our annual cost.
- No Local Improvement District (“LID”) is required under the USDA program. The LID required by the SRF program results in a required election (for which Colorado registered voters are eligible) to be held in November only. For the USDA program, all Hondius users will be allowed to vote for the project in a method to be determined by the Town, and not limited to a November election.
- The provisions of the Davis Bacon law are not required to be followed under the USDA program, while they are required under the SRF program. These requirements tend to increase the costs of construction.
Switching to the USDA program required a few additional considerations for the USDA that are different from the SRF, and having the Town complete the application to the USDA (since they would now be the entity incurring the debt on behalf of the Hondius water users). Also, this program would allow those currently not Hondius users to join the project if they elect to do so.
We continued work with the Town and USDA and at our August 1, 2016 public meeting, we presented the group with the updated PER and asked the Hondius members to sign a petition to the Town, indicating they were in favor of the project. The results of the petition would be used to demonstrate the willingness of the Hondius users to go forward with the project in order for the Town Trustees to determine whether the Town should also move forward (which they subsequently did).
Additionally, a meeting of the HWUA was held and a formal Board of Directors was re-established for the Association. As a result, the previous project committee was disbanded and its function is now addressed by the HWUA Board.
On August 1, 2017, another public meeting was held to present the results of the USDA’s approved plan to provide funding to the Town for the Hondius water line replacement project. The USDA committed to provide a loan of up to $2.894 million to be repaid at 2.625% over 40 years and in addition, a grant of up to $771,000. Once again the Hondius users voted to continue with the project.
Since this time and prior to our 2019 Annual Meeting, the Town determined that certain provisions of the planned project were not adequate and that a more realistic estimate of the cost of the project, including an increase of almost $1.5 million of administrative costs, would be approximately $5.6 million. This information was presented to the members at the Annual Meeting and while it was acknowledged by those in attendance that such a cost likely made the project no longer viable, the Board was directed to determine the per member cost, considering this increased estimate, as well as to work with an engineering firm to determine additional project alternatives and the estimated costs related thereto.
Additional information regarding the historical progress of the project, the cost estimates for the project and the future progress on the project can and will be found on the Latest News tab of this site.