Central Montana Regional Water Authority

2009 Minutes

The following include minutes of CMRWA meetings held in 2009:

CENTRAL MONTANA REGIONAL WATER AUTHORITY
MUSSELSHELL-JUDITH RURAL WATER SYSTEM
Wednesday, December 9, 2009
Roundup City Offices

In Attendance: Joel Marking, Roundup; Jim Schladweiler, Roundup; Jack Thoreson, Broadview; Loren Randall, Auditor; Lenny Dubertstein, BoR-Billings; Sandy Kust, MAP-Ballantine; Thad Bassett, Melstone; Tim Cavannaugh, Harlowton; Tom Horan, Harlowton; Jim Kalitowski, Harlowton; Robert Church, Great West Engineering-Helena; Lon Sibley, Roundup; Matt Harris, Great West Engineering-Helena; Monty Sealey, Project Administrator.

Welcome and Introductions: Monty asked if he should conduct the meeting in the absence of a Chariman; the group agreed. The meeting was called to order by Sealey; each participant introduced themselves.

Minutes: The minutes from the November 12 meeting were approved after a motion to approve by Bassett and a second by Kalitwoski.

Treasurer’s Report: Treasurer Schladweiler reported a balance in the Authority account of $89,853.34, after the latest payment to Great West Engineering of $32,786.10. Sealey mentioned he did not yet have a bill from our attorney, but was sure there would be one because of the work with land owners at the new drilling site. Marking moved to approve the report, seconded by Horan; motion passed.

Water Authority Board Issues: Sealey had received a letter of resignation from Steve Habner, Lavina. The resignation was related to a personal matter, not related to our water project. Sealey stated that we need to find a replacement for Steve and confirm who will represent Hobson if Dale no longer is.

Tom Horan tendered his resignation, as of the end of the meeting and introduced his replacement, Tim Cavannaugh.

Land Owner Negotiations: Bob Church said they had sent comments to Hubble from the last meeting. The ball is now in the land owner’s court. Based on our draft comments, we have not received a response.

Phase II Feasibility Report: Bob Church and Matt Harris from Great West Engineering gave a comprehensive summary of the Phase II work, which included draft publications and a Power Point presentation. The Phase II presentation included Storage, Pumping and Controls analysis.

BoR-Rural Water Act Status: Lenny Dubertstein from BoR reported that he expected a draft of technical standards by the 14th for review. He said he thought he could begin the review of our Appraisal Report, along with the new standards and NEPA compliance issues. He state that the NEPA review is one of the more complex parts of the work to be done. He hoped to be able to report some progress to us at the next meeting.

Election of Interim Officers: Since we had not recently held elections and with the desire of Dale Longfellow to be relieved of some of his duties, including Mayor of Hobson, Tom Horan moved, seconded by Jim Kalitowski, to elect Joel Marking as Chairman, Jim Kalitowski as V. Chairman and Jim Schladweiler as Secretary-Treasurer; motion passed.

Next Meeting: The Board decided to have the next meeting on January 13 in Harlowton. The Meeting was adjourned.

Submitted by Joel Marking/Monty Sealey

Central Montana Regional Water Authority
Musselshell-Judith Rural Water System

Thursday, November 12, 2009
Roundup City Offices

In Attendance: Jim Schladweiler, Roundup; Steve Habener, Lavina; Lon Sibley, Roundup; Matt Harris, Great West Engineering; Robert Church, Great West Engineering; Bill Edwards, Roundup; Thad H. Bassett, Melstone; Rick Duncan, DNRC-Helena; Lenny Dubertstein, Bureau of Reclamation-Billings; Monty Sealey, Central MT RC&D.

The meeting time and attendance were unusual because of poor roads and change of time because of Veteran’s Day occurring on the regular meeting day. The meeting was conducted, however no votes could be taken because of the lack of a quorum.

Minutes from the September 9 Meeting: Minutes from the September 9 meeting were continued because of lack of a quorum. No October meeting was held.

Treasurer’s Report: Treasurer Schladweiler gave a report that the current bank balance was $122,639.44. We still have $298,000 at DNRC for the current biennium, that has not been requested. No bills were presented, although it was noted that Great West Engineering had a bill and would forward a copy to Sealey. It was also noted that our attorney, Jim Hubble had been doing some work on the landowner well-site agreements and would certainly have a bill for us in the future.

Landowner Negotiations: Bob Church reported that work was continuing to reconcile differences in language for the land owner agreements and that we will continue until the final language, then bring it back to the Authority for approval.

Election of Officers: Election of Officers will be continued until the December meeting, so we have a quorum. So far Steve Habener has offered his name up for Chairman. All other current officers have agreed to leave their names on the ballot for 2010.

Phase II Feasibility Report: Matt Harris and Bob Church, from Great West Engineering presented a slide show, printed copies and explanation of the Pipeline Route Alternative Analysis, Phase II Feasibility Report. The report looked at several different route alternatives and projected pricing, environmental costs, etc., for each route. It was estimated that the Phase II report would be competed by the end of the year, which will then be sent to BOR if the new rules are available. The next step in the process is a low level environmental review of the preferred alternative.

Bureau of Rec. Program Status: a discussion was held about the status of the BOR program. Mr. Duberstein hoped the rules will be out in December. The discussion noted that in order to do the higher level environmental study for NEPA needs to include a federal sponsor; in this case BOR. Other pieces yet to be conducted include the financial and economic analysis.

The next Water Authority meeting will be in Roundup on Wednesday, December 9.

The meeting was adjourned.

Submitted by: Monty L. Sealey

Central Montana Regional Water Authority
Musselshell-Judith Rural Water System
Wednesday, September 9, 2009, 1 p.m.
Roundup City Office, Roundup, MT

In Attendance: CMRWA community representatives: Dale Longfellow, Hobson; Steve Habener, Lavina; Jim Kalitowski, Harlowton; Bob Church, Great West Engineering; Rick Duncan, DNRC; Monty Sealey, Central Montana RC&D Coordinator, Carrie Mantooth, Central Montana RC&D Assistant Coordinator; Lon Sibley, Roundup and Jack Thoreson, Broadview.

Welcome and Introductions: Chairman Dale Longfellow welcomed everyone to the meeting.

No Quorum: There weren’t enough members in attendance to reach a quorum, so these minutes are unofficial.

Treasurer’s Report: In absence of Treasurer Jim Schladweiler, Monty reported a balance of $132,692.88 (after paying bills presented at this meeting). There was a bill of $15,299.56 from Great West Engineering and a credit from Great West of $6,249.51 for a duplicate payment, resulting in a balance owed of $9,050.05, and a travel claim from Jim K. for $75.90.

2006 Rural Regional Water Act Rules Status: Dale said he visited with Rick DeVore of Bureau of Reclamation, about the status of the rules for the 2006 Act and he indicated those would be finalized soon. The rules are supposed to be done by October, but the group is not optimistic that newest deadline will be met. Bob said the appraisal has been revised based on the draft rules, but as soon as those are finalized they will act quickly to adjust the appraisal as needed. Once the appraisal is approved, CMRWA can apply for funding to complete the production well.

Option/Lease Agreements – Legal Response: Jim Hubble responded to Bob regarding the letters received from attorneys representing two landowners CMRWA is negotiating with regarding production well field sites. Bob explained questions and responses regarding several portions of the agreement. The group discussed the indemnity clause, waiver of subrogation clause, warrant of title, stock water, and other points. The issue of stock water will need to be clarified. Bob had talked to Stephanie Helleckson with Bureau of Reclamation, and stock or incidental water usage will likely be allowed for no more than 15 percent of the water usage, and not for commercial (stockyard) purposes. Rick said Congress is much more interested in funding municipal water rather than livestock, but all of the Dakota regional projects have included a stock water component.

Bob will continue to work with Jim Hubble on responses to the landowners, along with Mark Cunnane, who has been communicating with the landowners. He will bring the response to CMRWA and hopes they will have a response to the landowners by the end of October.

Rick suggested talking now to rural electric cooperatives about power usage. The group also revisited the discussion about Senators Baucus and Tester supporting regional water project that have not gone through the Bureau of Reclamation process. They discussed continuing to monitor progress and if the projects are able to proceed, reevaluating whether CMRWA should do the same.

Discussion was also held regarding the possibility of CMRWA being eligible for lower power rates through the Pick-Sloan Missouri Basin agreement.

Election of Officers: Monty said it’s been two years since officers were elected and suggested appointing a nominating committee and holding elections at the next meeting. Current officers are Chairman, Dale Longfellow; Vice Chairman, Steve Habener; and Secretary/Treasurer, Jim Schladweiler. Dale told the group he needs to give up the position. Hobson Town Council voted not to move forward on a town water distribution system and turned back a grant to do the design work. He also cited some health issues as a reason for needing to cut back. He added that Hobson will continue as part of CMRWA and he wants to continue to attend meetings. Monty will call CMRWA members and see who is interested in an officer’s position and bring that to the next meeting.

Public Outreach: Any towns that want to hear a presentation about CMRWA should contact Monty. The group reiterated the importance of keeping town councils and others informed about CMRWA’s progress and intent.

Next Meeting: The next CMRWA meeting is set for Wed., Oct. 14 at 1 p.m. in the Roundup City Council Chambers. Bob will do a presentation on the draft appraisal.

Minutes prepared and respectfully submitted by:
Carrie Mantooth, Central Montana RC&D Assistant Coordinator

Central Montana Regional Water Authority
Musselshell-Judith Rural Water System
Wednesday, August 12, 2009, 1 p.m.
Harlowton Public Library, Harlowton, MT

In Attendance: CMRWA community representatives: Dale Longfellow, Hobson; Steve Habener, Lavina; Jim Kalitowski, Harlowton; Bob Church and Matt Harris, Great West Engineering; Rick Duncan, DNRC; Monty Sealey, Central Montana RC&D Coordinator, Carrie Mantooth, Central Montana RC&D Assistant Coordinator; Mike Waite, field representative for Congressman Denny Rehberg; John Peccia, Harlowton, Lon Sibley, Roundup and Jack Thoreson, Broadview.

Welcome and Introductions: Chairman Dale Longfellow welcomed everyone to the meeting.

Minutes of the June 10, 2009 meeting: Minutes of the last meeting in Roundup were emailed in advance to CMRWA representatives and circulated at the meeting. Steve made a motion to accept the minutes as presented, seconded by John and unanimously approved.

Treasurer’s Report: In absence of Treasurer Jim Schladweiler, Monty reported a balance of $159,876.46 in the CMRWA account. He said bills that were approved at the last meeting for $8,292.76 to Great West Engineering and for $75.90 to Jim Kalitowski for travel expenses have not yet been paid. New bills from Great West include $10,444 for work completed May 17-June 20 and $9,652.07 for June 21-July 18. Steve made a motion, seconded by John and unanimously approved to pay the bills.

Travel Claims: None presented.

Appraisal Report Status: Bob said he visited with Mike Ryan, Bureau of Reclamation’s Great Plains Regional Director, and he put him in contact with a Reclamation engineer in the Dakotas. Bob has been told that the Rural Water Supply Act of 2006 rules will be finished in November 2009. The draft rules are going through internal and external review and then there will be public meetings before the rules are adopted, so the group was skeptical about the November target date. Bob was told that Reclamation is proposing that its 2009 $900,000 appropriation for feasibility (for the 15 state region) be added to 2010, for a total of $3 million. Great West has revised the appraisal report that was submitted nearly two years ago to reflect the DRAFT rules, which were given to them by Stephanie Helleckson with the Billings Reclamation office. Bob explained that they hope the appraisal will be ready to immediately submit when the rules are finalized. The appraisal is similar to the original, but the outline was expanded and minor additions made. Mike Waite expressed concern that CMRWA would have to go through the process again and asked if any guarantee had been given that this wouldn’t happen. Bob explained that there isn’t a guarantee, but they are doing everything they can to make sure the appraisal is as close to the draft rules as possible. Discussion followed about the possibility that CMRWA would not be at the front of the line with its appraisal report and request for feasibility funds even though it has been ready nearly two years as CMRWA waits for the rules. He also noted that Stephanie said that Dry Prairie will be first in line, since they are already authorized. The process is a competitive one and Bob did say a further delay will definitely negatively impact the project as it seeks authorization.

Great West is continuing to work on the feasibility, and Phase 1 is complete. Both the revised appraisal and Phase I feasibility were distributed to CMRWA members. Carrie will upload them on the CMRWA website at www.centralmontanawater.com. They are working on Phase II, including pumping, storage and supply analysis.

Congressional/Legislative Initiatives: The group continued to discuss the “catch 22” of following the Reclamation rules for rural water projects. Dry Red Water skipped going through Reclamation and were supported by Senators Baucus and Tester. However, they may not be supported for authorization by Reclamation and committee members. Because CMRWA isn’t authorized yet, they haven’t received any Stimulus funds, even though the production well project was approved by DEQ and on the list.

The merits of hiring a lobbyist in D.C. were discussed. Bob said a lobbyist could held at the state and federal level and be the person that could be contacting staffers about CMRWA. Mike agreed that there is something to be said for having a presence in D.C., but said having someone directly involved in the project travel to D.C. can be very effective.

Reclamation received $1 billion in Stimulus funding, but only $200 million was designated for authorized regional water projects. The group discussed disappointment that more funds weren’t directed towards feasibility.

Monty said he’s also been dismayed that CMRWA has been working on this project for years longer than Dry Prairie and St. Mary’s, but yet CMRWA hasn’t been invited or acknowledged to attend several meetings, including the water forum held this week in Billings.

On a positive note, Bob said great progress is being made on the feasibility, which will need to be done eventually, so CMRWA is ahead of the game in that regard.

Option/Lease Agreements: CMRWA board members were given copies of the lease agreements with two landowners in the proposed well field site, their responses from legal counsel, and Bob’s comments in response. Bob will contact CMRWA’s attorney Jim Hubble to continue working on negotiations, but the group felt the changes requested were not unreasonable. Dale asked about a parcel of State Land near the highway at Straw and Bob said they had looked at that alternative and it is included in the feasibility report, however Mark Cunnane felt that since the site is lower in elevation, the pumping costs would be significantly increased. Bob will also ask Mark to update the landowners to let them know CMRWA is working on its response.

Public Outreach: Monty spoke to the Harlowton City Council and said the new council members weren’t familiar with the project at all and said they were very interested and supportive of the project. The group agreed that efforts to go back to town councils and other interested groups to update them on the project would be beneficial.

Other Business: Dale was contacted about using the Utica test well water for testing new fuel tanks being built at Buffalo. The tanks are tested with water prior to being filled with fuel. The board had no objections to this, but will need to make sure the water right will allow it. Bob will contact the DNRC office in Lewistown about the possibility of selling water to them.

Next Meeting: The next meeting will be held Wed., Sept. 9, 2009 in Roundup.

Minutes prepared and respectfully submitted by:
Carrie Mantooth, Central Montana RC&D Assistant Coordinator

CENTRAL MONTANA REGIONAL WATER AUTHORITY
Musselshell-Judith Rural Water System
Wednesday, June 10, 2009; 1:00 pm
Roundup City Offices

In Attendance: Thad Bassett, Melstone; Jack Thoreson, Broadview; Dale Longfellow, Hobson; Sandy Kraft, Ballantine MAP Representative; Steve Habener, Lavina; Harry Walen, MT Rural Water Systems Representative; Joel Marking, Roundup; Jim Kalitowski, Harlowton; Tom Horan, Harlowton; Lon Sibley, Roundup; Monty Sealey, CMRCD.

Welcome and Introductions: Chairman Longfellow called the meeting to order at 1:00 pm and welcomed those in attendance. Introductions were made.

Treasurer’s Report: The Treasurer’s Report was given by Monty Sealey, on behalf of Jim Schladweiler. Sealey reported a bank balance of $168,245.12, including the draw down of $149,000 from the second half of the biennium from DNRC. Steve moved approval of the report, seconded by Joel; passed. Two bills were presented including Great West Engineering for $8,292.76 and Jim Kalitowski for $75.90 (travel costs). Moved by Jim, seconded by Tom to pay the bills; passed.

Landowner Leases: A discussion was held about the negotiations with land owners at potential drilling sites. The group discussed comments received about one of the leases, item for item as put forth in the letter from their legal counsel. Comments had not yet been received from the second party to the lease discussions.

Project Status: It was mentioned that the Dry Red Water project had been introduced for authorization in SB637 (?) by Thomas. Discussion continued about the difference in the path they are taking for authorization than ours. It is not clear if and when Dry Red Water will have to go through the Bureau of Reclamation rules under the Rural Regional Water Act of 2006, after the authorization process.

Related to that discussion, Sandy stated that David Comb was the staff contact for Senator Baucus and Matt Jennings was the contact for Senator Tester, for water development issues. The group still questioned whether we should try to put together an October visit to Washington D. C. This may become more worthwhile because a second round stimulus package may be coming out.

Project Education and Promotion: A suggestion was made to come up with a public information methodology that includes the “10 most asked questions” related to our project. It could be added to our website and used in news media and presentations to town councils. The group also thought we could consider asking other communities to come in and discuss regional water with our communities. Sealey suggested we should be setting up meeting times with participating City Councils to bring them all up to date about this project and let them ask questions, face to face.

Next Meeting: The next meeting will be in Harlowton on July 8. Meeting was adjourned

Submitted by Monty L. Sealey, Project Admin.

Central Montana Regional Water Authority
Musselshell-Judith Rural Water System

Wednesday, May 13, 2009, 1:00 PM
Homestead Bar, Broadview, MT

In Attendance: Dale Longfellow, Chairman; Dustin White, MAP; Jim Klitowski, Harlowton; Bill Edwards, Roundup; Bob Church, Great West engineering; Lon Sibley, Roundup; Jack Thoreson, Broadview; Robert Conover, Broadview; Maggie Conover, Broadview; Thad H. Bassett, Melstone; Steve Habener, Lavina; Monty Sealey, Central MT RC&D.

Welcome and Introductions: Chairman Longfellow called the meeting to order at approx. 1:00 pm., and welcomed those in attendance. Introductions were made.

Treasurer’s Report and Bills: The treasurer’s report was given by Monty Sealey, on behalf of Treasurer Jim Schladweiler. Sealey report a bank balance of $25,689.73 before current bills. It was also reported that a bill to DNRC for the 2nd ½ of the biennium appropriation was submitted to DNRC in the amount of $149,000; and that the RDBG grant of $300,000 was still in place, waiting for additional funding.

Bill were presented for payment: Hubble Ridgeway, $126.00; Great West Engineering, $6,249.51; and a travel claim for $67.10. The report was accepted and passed.

Audit: Sealey handed out copies of the FY2008 Audit from Loren Randall. Randall was willing to come down to a meeting if the Board thought necessary. The Board thought the written report was sufficiently detailed and did not think a visit would be necessary.

Project Status: Bob Church reported that the written Phase I Feasibility Report was 95% complete and that the Appraisal Report had been submitted to BOR in October 2007. We are still waiting for BOR to set and adopt the rules that dictate the final format of the Appraisal Report.

The Phase II Feasibility report that includes the pumping, storage and distribution alternatives, will begin shortly; pending approval of the contract request in the amount of $120,000. Steve Habener made a motion to approve; seconded by Thad Bassett, the contract extension with Great West; motion passed.

Church also reported about the previous day’s meeting with Stephanie at BOR. She said she has the draft guidelines for content and format of Appraisal Reports; still to come are directives and standards. Their program will not be official until summer/fall 2009. She estimates that 80-85% of the existing report complies. When the rules are finally adopted, the call for money will be quick and close. The had $900,000 available for this year, however, if the program is not finalized in time the money will go away till next budget year. Her and Bob recommended finish the Appraisal Report under the these rules, so we’re ready when the final rules appear. Bob estimated a cost of $2,000-3,000 to bring them up to date at that time. Steve Habener made a motion to complete the Appraisal Report under the currently known guidelines; seconded by Thad Bassett; motion passed.

Landowner Leases: Bob Church gave a report about the meeting with landowners west of Garneill about potentially lease land to drill the next sell(s) on (or first choice from the Phase I Alternatives Study). Attending the meeting for the Water Authority were Bob Church, Mark Cunnane, Steve Habener and Monty Sealey. They landowners intend to submit the proposed lease documents to their attorney(s) and will get back to us in the near future. The meeting seemed quite positive.

Next Meeting: The Board decided the next meeting would be at 1:00 pm in Roundup on June 10. With no other business, the meeting was adjourned.

Submitted by Monty L. Sealey, Project Admin.

Central Montana Regional Water Authority
Musselshell-Judith Rural Water System
Wednesday, April 8, 2009, 1 p.m.
Harlowton Public Library, Harlowton, MT

In Attendance: CMRWA community representatives: Dale Longfellow, Hobson; Steve Habener, Lavina; Jim Kalitowski, Harlowton; Thad Bassett, Melstone; Bob Church, Great West Engineering; Monty Sealey, Central Montana RC&D Coordinator, Carrie Mantooth, Central Montana RC&D Assistant Coordinator; Stephanie Helleckson, Billings, Bureau of Reclamation; Jack Thoreson and John Wilken, Broadview; Sandy Kust, Ballantine of Mid-West Assistance Program; Steve Metcalfe, Stacey Kelly and Bill Lea, Hobson.

Welcome and Introductions: Chairman Dale Longfellow welcomed everyone to the meeting and introductions were made. There was no quorum, so it was noted that no official action could be taken.

Minutes of the March 11, 2009 meeting: Minutes of the last meeting in Harlowton were emailed in advance to CMRWA representatives and circulated at the meeting. Dale said he wanted to add some information in regards to the discussion at the March 11 meeting about the water situation in Hobson. At the last meeting it was reported that two bars and a restaurant in Hobson may be shut down because of nitrates in their well water. Steve Metcalfe of the Elk Ridge Saloon was present at today's meeting and he told the group that they are all under compliance and not in danger of being shut down. He said their monthly nitrate samples are under half the recommended levels. He said in December 2007, their levels were all over 13, but three days later, were all under 7. The last nitrate test was 4.52. He said they’ve had problems with DEQ losing samples, so had to go from quarterly to monthly sampling. Steve also noted that the suggestion that the businesses could solve the problem by purchasing a $10,000 water treatment system isn’t feasible, as they can’t afford it. Discussion followed by CMRWA members that it’s good that these businesses aren’t in imminent danger of being shut down by DEQ because of nitrates in the water. Monty asked the Hobson business owners to contact CMRWA if they need assistance in working with DEQ. Discussion continued that the CMRWA delegation regrets that the discussion and subsequent minutes of the last meeting reported the situation to be much more dire for these businesses than exists since their nitrate levels have dropped and they are in compliance with DEQ and therefore not in danger of being shut down.

Treasurer’s Report: In absence of Treasurer Jim Schadweiler, Monty reported a balance of $42,131.87, and reminded the group that they will draw down another $149,000 from DNRC before the end of June. Bills already subtracted from that balance included $840 from Hubble, Ridgeway, Unmack & Westveer for Jim Hubble’s review of the draft of a lease with landowners for a production well; and $13,215.15 from Great West Engineering as of March 27. The next appropriation from DNRC will be $298,000 for the biennium, as long as the Legislature approves the budget.

Bureau of Reclamation Process Update: Bob reminded the group that the appraisal report was submitted a year and a half ago to Bureau of Reclamation, anticipating the passage of the 2006 Rural Water Supply Act. Stephanie Helleckson with the Reclamation said they will compare that appraisal with the finalized guidelines when they have them. She hopes that since the CMRWA appraisal was already completed, they won’t be required to restructure the outline to follow the exact sequence of the new rules. Bob said their goal is to get that phase finished so they are eligible to request funds to continue working on the feasibility study as quickly as possible. Reclamation’s interdisciplinary team may write portions of the feasibility, which could slow the process down considerably. Stephanie said who the team is and their responsibilities are still unknowns, but she hopes to be a member of that team. Bob said he’ll have a draft feasibility report at the next meeting and hopes they can submit it to Reclamation as soon as possible and get it approved, opening the door to other funding. Bob spent some time in the Judith Gap and Utica areas looking at alternate pipe sites, private vs. public access, powerline options, etc., and said there are existing pipelines that they CMRWA may be able to run pipe alongside.

Stimulus Funds & Bureau of Reclamation Process: Bob testified on HB-645 regarding Stimulus funds, but it appears CMRWA’s water project won’t get any funds since they’re not yet a federally authorized project. Bob and Monty both noted that nothing changes within the project if they don’t get Stimulus funds – the group just keeps moving forward as planned. Stephanie said she will continue to go to bat for CMRWA and remind Bureau of Reclamation officials that the appraisal report has been in their office for a year and a half. The group thanked Stephanie for her assistance. Discussion followed on Dry Red Water’s methodology of bypassing Bureau of Reclamation and going straight to D.C. to ask for authorization. Both Senators Baucus and Tester are introducing a bill for authorization, but yet have not acknowledged CMRWA. Stephanie said Bureau of Reclamation will testify against authorizing the project. She said CMRWA could keep going through the Bureau and still seek authorization in a parallel effort. The group discussed the hope that there will be a pay-off for CMRWA for “playing by the rules.” Bob recommended seeing what happens and continuing down the route they are on. However, the group decided that writing letters to Montana’s senators to ask their advice on getting this project funded would be appropriate.

Great West Contract, Phase II: Bob said Great West would like to get started on Phase II (distribution, storage and pumping alternatives, at a cost of about $120,000) and asked about approval for the next phase of their contract. Steve made a motion, seconded by Thad and unanimously approved to move forward on the contract and do a phone call vote to the rest of the membership to confirm the motion.

Landowner Lease Agreement Draft: The draft of the lease agreements for landowners where production wells could be located was distributed. Discussion continued about the three phases in the agreements and possible scenarios. Suggestions were made for the agreements, which were to be presented to the landowners soon.

Utica Well: Mark Cunnane was working with DEQ on getting certification for the Utica well as a public water well. Monty said they also need to get reclamation done at the Utica well site. Central Montana RC&D will pay for the work to be done, which includes spreading the gravel out and reseeding it. Dale said he would give Monty the name of a contractor in Utica who could do the job.

Next Meeting and Adjournment: The next regular meeting is Wed., May 13, at 1 p.m. in Broadview. With no other business, the meeting was adjourned.

Minutes prepared and respectfully submitted by:
Carrie Mantooth, Central Montana RC&D Assistant Coordinator

Central Montana Regional Water Authority
Musselshell-Judith Rural Water System
Wednesday, March 11, 2009, 6 p.m.
Harlowton Public Library, Harlowton, MT

In Attendance: CMRWA community representatives: Dale Longfellow, Hobson; Steve Habener, Lavina; Joel Marking, Roundup; Jim Kalitowski, Harlowton; Thad Bassett, Melstone; Bob Church, Great West Engineering; Rick Duncan, DNRC; Monty Sealey, Central Montana RC&D Coordinator, Carrie Mantooth, Central Montana RC&D Assistant Coordinator; John Peccia, Jeff Sell, Harlowton; and Jack Thoreson, Broadview.

Welcome and Introductions: Chairman Dale Longfellow welcomed everyone to the meeting and introductions were made.

Minutes of the Feb 11, 2009 meeting: Minutes of the last meeting in Roundup were emailed in advance to CMRWA representatives and circulated at the meeting. Steve made a motion to accept the minutes as presented, seconded by Joel and unanimously approved.

Treasurer’s Report: In absence of treasurer Jim Schladweiler, Monty reported a balance of $92,212.60 in the CMRWA account and presented bills from Great West for December and January for $32,495.71 and $17,190.02; and from Montana Association of Conservation Districts for $395 for sponsorship of the legislative reception in Helena. This will leave a balance of $42,131.87. An additional $149,000 will be added to the account following a draw down for this fiscal year’s DNRC appropriation. Thad made a motion, seconded by Steve and unanimously approved to accept the treasurer’s report.

Travel Claim: Dale submitted his travel claim (registration) for the Montana Rural Water Conference in Great Falls, which was approved at the last meeting.

Project Update/Bureau of Reclamation Status: Bob said Stephanie Hellekson with Bureau of Reclamation said the Rural Water Supply Act rules should be finalized in about three weeks. Once completed, Stephanie will review the appraisal report already submitted, make any changes necessary to comply with the new act and then CMRWA can apply for funds to finish the entire feasibility report. Bob said they are working on rolling all three of the Phase I feasibility reports (presented at the last three meetings) into one document. This will be completed prior to the April meeting. The next step in the feasibility is to look at pipeline alternatives; including model and cost. Bob distributed an amendment on the contract for the next phase of work, including distribution, storage and pumping alternatives, estimating this work will cost CMRWA $120,000. He noted that with the final work to be done in the last phase, Great West will be at about $73,000-79,000 of the $80,000 allocated for their work – right on track to come in at the $250,000-270,000 total allocation for Great West’s work on the entire project. Discussion continued that if CMRWA is able to drill the second production-sized test well soon, then Great West won’t have to spend so much time and effort on some of the other well site alternatives, which will reduce the project scope and cost. The group decided to wait and see if funding for the second test well comes through before signing the contract amendment for the next phase.

Rick Duncan with DNRC also suggested Bob visit with Reclamation about the Stimulus money that is being added to their program in 2009 – an additional $1-1.5 million for rural water projects. It was noted that even if CMRWA doesn’t receive any of that Stimulus money, it would at least clear some of the backlog and improve chances for being funded sooner. Discussion also continued on whether CMRWA would be required to do a full-blown Environmental Assessment (EA) in the feasibility, or a more limited Preliminary Environmental Review (PER). Bob will follow up on that. Bob noted that they completed an environmental screening (about $15,000) in the appraisal report, but were figuring about $75,000 for an EA.

Stimulus Bill: Rick Duncan gave some background on how the list for potential Stimulus projects in Montana was developed, which includes $1.8 million for CMRWA on the infrastructure and transportation list. He emphasized that the group shouldn’t get their hopes up that their project will be funded, as the project requests far outweigh Stimulus funds. He said DNRC was asked to submit potential projects in Montana in January. He talked to Bob and Dale to derive the total including the second test well (to match $300,000 from a DNRC grant) and funds to bring pipe from the Utica test well to the town of Hobson (at a cost of $750,000-800,000). A long discussion followed with these key points noted:
- CMRWA cannot do any design and construction prior to federal authorization or our position will be jeopardized with Bureau of Reclamation. So, if the pipe from Utica to Hobson is completed prior to authorization, it will be by the Town of Hobson, not CMRWA.
- House Bill 645 regarding the Stimulus is 64 pages long and hasn’t been passed yet, so there are still a lot of unknowns, but the water project component appears to be 50 percent “debt forgiveness” and 50 percent loan.
- There are many projects on the list that haven’t even completed planning for their projects and the intent is to use the funds for “shovel ready” projects. If CMRWA receives Stimulus funds they can’t build the pipe from Utica to Hobson, but they will be ready to go on a second production-sized test well (likely to be the UBet site).

Hobson Water: Dale told the group that he feels he’s serving two masters because Hobson is in desperate need of a water system now, yet CMRWA’s project is still a few years from construction. A long discussion followed about the process, with the consensus of the group that Hobson is at least three years away from being able to get a water distribution system built for the town. Dale said Hobson has just gone out for bid to hire an engineer to do planning for a water distribution system in Hobson. Two bars and a restaurant in Hobson may be shut down because of nitrates in their well water. DEQ is working with them though and Bob said a $10,000 investment by each of them to purchase a water filtration system would take care of their immediate problems. Steve said Lavina is in the same situation – they don’t have a town water distribution system. Several in the group told Dale that he is at least three years away from being able to go through the planning process, then the process to fund and construct the water distribution system, so even if he could get the pipe from the Utica test well to Hobson built he won’t have the distribution system in place. Hobson is on the SRF Water Priority List, which will receive $19 million through the Stimulus package. However, Bob reiterated that these are 50 percent “debt forgiveness” and 50 percent loans. Hobson has bonding authority (CMRWA doesn’t) but Hobson will still need to get the residents’ support. Dale said he was considering resigning, but agreed to continue as CMRWA’s chairman.

Several CMRWA members discussed that from the time the project was launched, they knew it would be a long, long process, but the project is right on track – highly unusual for a large project. They emphasized that they are accomplishing just what they set out to do, but patience is required for authorization and they must follow Reclamation’s Rural Water Supply Act rules or they won’t be funded. The group urged Dale to be patient regarding both CMRWA and Hobson’s water distribution system. Dale said he would do everything he can to move Hobson’s project along in the meantime. Hobson’s and CMRWA’s projects will likely be running parallel as far as time frame, which is good timing.

Who’s Still With Us? Dale said his town council is “110 percent behind CMRWA” as they know they need the water, the other representatives present said their town councils are still on board, too, including Harlowton, Roundup and Broadview. Monty said all of the original CMRWA members still want to be part of the project.

Drilling Site Lease Discussion: A meeting with landowners at the UBet site has been delayed because the landowners are in the throes of calving season. However, the committee has been working with CMRWA’s attorney Jim Hubble on a three step process for a contract including:
- Option for CMRWA to drill test wells on the property for a maximum of five years.
- Paying the landowner(s) for a lease on bare land for the test wells, with a value per acre for the well site.
- Paying a higher value lease on the permanent well site where the production wells will be located.
DEQ is looking at approving the test well sites without landowner agreements – this will help CMRWA prepare to act quickly if we do receive Stimulus funds. The meeting with landowners will be sometime in April.

Next Meeting and Adjournment: With no other business, the meeting was adjourned. The next meeting will be at the Harlowton Public Library at 1 p.m. on Wed., April 8.

Minutes prepared and respectfully submitted by:
Carrie Mantooth, Central Montana RC&D Assistant Coordinator

Central Montana Regional Water Authority
Musselshell-Judith Rural Water System

Wednesday, February 11, 2009, 6 p.m.
Roundup City Council Chambers, Roundup, MT

In Attendance: CMRWA community representatives: Steve Habener, Lavina; Jim Schladweiler, Roundup; Tom Horan and Jim Kalitowski, Harlowton; Thad Bassett, Melstone; Bob Church, Matt Harris and Patrick Murtagh, Great West Engineering; Mark Cunnane, Western Groundwater Services; Liz Ching, field representative for Sen. Max Baucus; Monty Sealey, Central Montana RC&D Coordinator, Carrie Mantooth, Central Montana RC&D Assistant Coordinator; Lon Sibbly, Bill Edwards, Roundup; David Kojetin and Eugene and Karen Sanguins, Lavina.

Minutes of the Dec. 10, 2008 meeting: Minutes of the Dec. 10, 2008 meeting in Broadview were emailed in advance to CMRWA representatives. Steve made a motion to accept the minutes as presented, seconded by Tom and unanimously approved.

Treasurer’s Report: Treasurer Jim Schladweiler reported a balance of $92,212.60 in the CMRWA account. Great West Engineering sent bills to chairman Dale Longfellow for December and January, but he was not present at the meeting and Bob didn’t have copies with him. Great West will send copies of the bills from now on to Monty, as well as to Chairman Longfellow. Jim made a motion, seconded by Thad and unanimously approved to accept the treasurer’s report and pay the bills. Monty reminded the group that CMRWA will pay travel for CMRWA members if they aren’t reimbursed by the entity they represent. Monty noted that they have available an additional $149,000 for the year with DNRC that they haven’t drawn down. A request for the next biennium of $298,000 in the DNRC budget and must be approved by the Montana Legislature. An extension was granted by DNRC on the $300,000 Reclamation and Development grant; it will now expire on June 30, 2010.

Audit Signatures: Monty said Loren Randall, CPA, has the draft audit report finished. A management representation letter explaining any change in asset balances, etc., must now be returned to the auditor before the audit is finalized. Monty prepared a letter, but needs to have it signed by an officer. Vice chair Tom Horan will sign the letter and Monty said he’ll distribute copies of the final audit at the next meeting.

Helena-Legislative Reception: Monty was the sole representative from CMRWA at a Jan. 31 reception for legislators in Helena showcasing regional water projects in Montana. Carrie prepared a presentation board on CMRWA for the reception and other venues, which told the story of CMRWA, including its history, next steps, benefits, funding thus far, etc. She also updated the CMRWA newsletter and has these available on the CMRWA website at www.centralmontanawater.com. Monty thanked her for her work on this. He said he fielded many questions at the reception about the 220 miles or so length of the pipeline and people asking if they couldn’t have found water closer. There seems to be a prevailing attitude that this is a Roundup water project, so the group discussed the need to emphasize that communities all along the 200+ miles of pipeline will be served. They also agreed that there needs to be an emphasis on the fact that this water won’t need treatment. The group will develop a list of most commonly asked questions with the answers (i.e., Why have they chosen the Utica test well site? Why a regional project? etc.) and put it on the website. The major emphasis is that many of these communities can find plenty of water, it’s just not good water.

Federal Funding Requests:
- Bureau of Reclamation:
Bob said he talked to Stephanie Hellekson with Bureau of Reclamation and the Rural Water Supply Act rules should be in place in early March. There will be two steps in the planning process with the Bureau: Short alternative well site alternative (submitted to them in October 2007); and the feasibility report that Great West is working on now. As soon as the rules are finalized, the Bureau of immediately review the alternative report and then take applications (by summer or fall) to help fund the rest of the feasibility. Bob said Stephanie will work with them on getting the Appraisal Report approved. (The appraisal report includes alternatives, water rights analysis, infrastructure analysis, final recommendations & drilling plan. This work is under contract with Great West Engineering.) Bob reiterated that at a meeting in Billings in December, Bureau officials said that they will support projects that go through their process and follow Rural Water Supply Act rules. Liz said that they are at a standstill because there are so many regional water projects looking for funding and all competing for the same dollars.

- Stimulus Package: The federal Stimulus Package is looking for “shovel ready” projects and Monty received an email from Mary Heller, one of Rep. Denny Rehberg’s Montana staffers who is now in Washington, D.C., wanting an update on the project. Discussion followed on the vehicle for funding, which could include State and Tribal Grant (STAG) or Water Resource Development Act (WRDA). CMRWA’s federal appropriation requests were previously denied, but Bob said they could easily be resubmitted. Bob said the stimulus includes $500 million for the Bureau of Reclamation, which would include regional water projects, but has language about authorized projects. However, he noted that even if the funding is just for projects already authorized, it could help take care of the backlog and move projects like CMRWA forward. The group talked about the pressure to make sure the production well is shovel ready.

- Private investor: Monty told the group that an investment banking group from California was in Roundup looking at another project (ATechBuilder’s RTM Homes) and he talked to them about CMRWA. They are interested in buying bonds and this could be a means to strengthen this project, Monty said.

Rural Water Conference: The annual conference is next week in Great Falls and Monty said he had registered for booth space, but there is no room. Great West Engineering will put CMRWA’s story board and newsletters in their booth. Steve and Dale are planning on being there. Steve said the Town of Lavina is paying his registration. Steve made a motion, seconded by Tom and unanimously approved to pay Dale’s registration of $140.

Interim Project Summary: Bob prefaced the discussion by saying that tonight’s presentation is a summary of the analysis of alternative well sites, which is the first part of the feasibility report. The focus on this portion is cost, but Bob stressed that there is more to selecting the site than cost alone. Mark Cunnane presented the Phase I Feasibility Report, Water Supply Alternatives Evaluation Interim Project Summary No. 3, and distributed copies to those present. The report presented specs on turning the Utica test well into a production well, including a budget estimate. There would be about a $420,000 drilling cost reduction by using this existing test well. Mark also talked about water rights scenarios for permitting a new wellfield site, looking at the Judith Basin (Utica, New Liberty and Ubet) and Wheatland Basin, (Lode and Red Hill.) He discussed analysis of recharge, conductivity zones/paths, etc.; springs; and aquifer drawdown. In summary, he said there is a greater risk in the Judith Basin in getting water rights (because of other users), but favorable conditions include substantial excess recharge, discontinuities in aquifer and anomalous conditions at large springs. The favorable conditions for the Wheatland Basin are that there are no other users in the Madison Aquifer and non-tributary groundwater.

Mark then summarized estimated project costs for each potential wellfield site.
- Utica: Total capital cost for Utica is estimated at $104,631,000 and estimated 50-year operations maintenance and replacement (OM&R) cost is estimated to be $15,423,634 if constructed in 2012, with an annual OM&R of $645,525. Total 50-year lifecycle costs estimates are $120,054,634; translating to an estimated cost of users of $39.83/month.
- Ubet: Total capital cost for Ubet is estimated at $93,086,628 and estimated 50-year OM&R cost is estimated to be $12,238,267 if constructed in 2012, with an annual OM&R of $512,208. Total 50-year lifecycle costs estimates are $105,324,895; translating to an estimated cost of users of $33.65/month.
- New Liberty: Total capital cost for New Liberty is estimated at $102,357,680 and estimated 50-year OM&R cost is estimated to be $13,141,626 if constructed in 2012, with an annual OM&R of $550,016. Total 50-year lifecycle costs estimates are $115,499,306, translating to an estimated cost of users of $36.62/month.
- Lode: Total capital cost for Lode is estimated at $91,106,062 and estimated 50-year OM&R cost is estimated to be $11,986,184 if constructed in 2012, with an annual OM&R of $501,658. Total 50-year lifecycle costs estimates are $103,092,246; translating to an estimated cost of users of $32.94/month.
- Red Hill: Total capital cost for Red Hill is estimated at $106,321,177 and estimated 50-year OM&R cost is estimated to be $12,846,832 if constructed in 2012, with an annual OM&R of $537,678. Total 50-year lifecycle costs estimates are $119,168,009; translating to an estimated cost of users of $37.07/month.

An alternative decision matrix included in the report was also discussed, that scores each of the potential sites based on capital cost, annual cost, water rights and quantity potential, environmental impact, expandability and operations. However, it was noted that Utica scores high for water rights and quantity because it’s an existing well, which weights the well heavier than it may merit.

Mark said he is most comfortable with the Ubet site because it’s located on a flatter surface. Lode has more slopes and the minor faulting can be good if you hit the well just right, but is more risky. In summary, given the existing data, Mark recommends the Judith Basin and prefers the Ubet wellfield site. He said it would save about $10 million over the New Liberty site and also save significantly on OM&R. The drawback is that it is on private land so a long-term lease needs to be negotiated. Two landowners are in the wellsite area identified. Mark has met with both and they are willing to negotiate. One of the landowners was contacted in the early days of CMRWA when the group was looking for a test well site and negotiations ceased when they requested royalties on the water. An easement for the life of the project must be obtained before CMRWA can go to DEQ.

The group discussed their options and decided to move forward in negotiating with the landowners, with Great West taking the lead and clearing any agreements with Monty and CMRWA board. Great West also needs a contract amendment for $10,000 for submitting plans and well specs to DEQ. Steve made a motion to have Great West proceed in the negotiations with the two landowners in the Ubet site, to be reimbursed on an hourly rate, to approve any agreement with the CMRWA board and project administrator, Monty. The landowners have 30 days to decide (because of the urgency to be shovel ready if funded through the stimulus package) and to amend Great West’s contract for $10,000. The motion was seconded by Jim and unanimously approved. A sub-committee of Monty and Steve was appointed to review the agreement, send it to attorney Jim Hubble, and send to the board for approval.

Vice Chairman/Other Business: Tom Horan said he wants to remain on the CMRWA board, but resigned his position as vice chairman because he is travelling so much with his business and is unable to attend many CMRWA meetings. Tom nominated Steve to replace him as vice chairman, seconded by Jim and unanimously approved.

Next Meeting: The next CMRWA meeting will be Wed., March 11, at 6 p.m. in Harlowton. With no other business, the meeting was adjourned.

Minutes prepared and respectfully submitted by:
Carrie Mantooth, Central Montana RC&D Assistant Coordinator