Pertinent Information

WATER SYSTEM MAINTENANCE FEE INCREASE:  Prior to our last fee increase in 2020, we had not had an increase since 2010–ten full years.  The 2010 increase was the last in a series of four increases we had to commit to in order to qualify for the Department of Health loan needed to fund our first construction project.  Instead of choosing to raise fees by $60.00, as we did in 2010, our Board decided we need to build in a 5% increase to our water system maintenance fee every year.  That 5% increase in May of 2023 was $36.95, which brought the maintenance fee for 2023-24 to $739.06.  The next 5% increase will be $38.80.  This amount will be added to our current maintenance fee of $739.06, making the yearly maintenance fee $776.01 for the 2024-25 budget year, which is due in May of 2024.  This yearly increase will allow each of us to build this amount into our budget and is necessary for our community club to afford the funding for our new reservoir.  We thank all of you for your timely system maintenance fee payments.

Frequently asked Questions and Answers about the Proposed

Valleyhi Reservoir Replacement Project

Your Valleyhi Community Club volunteer board of trustees always works with our water manager and other professionals to maintain the overall operation of our shared water system.  Currently, we think it best to start with some common understandings.

Why is the Reservoir Replacement Project such a hot topic right now?

Since the creation of the Valleyhi community the major interest for each set of board members has been the status of our water system.  In 2009 all the distribution, main lines, and connections were updated, and meters and hydrants were installed.  This was all funded by a Washington State Drinking Water State Revolving Fund (DWSRF) loan. With a principal of $734,181 and interest of $108,333 at 1.5%, the loan is to be paid back over 20 years.  Our current balance is $194,385.  We are on schedule to pay off this loan in 2028.

We all rely on a 20,000-gallon reservoir, built in 1978.  It surely has a limited life left in it. The fire department limits their use of our fire hydrants because of their genuine concern about damaging our system. This means water must be hauled by truck from Peshastin or Monitor to fight any fires that break out in Valleyhi.  In addition, the State’s Department of Health will approve only a small number of new connections without replacing the reservoir. These factors, combined with rapidly rising construction costs, and the possibility of lower interest rates from the DWSRF, make the reservoir replacement project a special focus right now.

Which members are currently paying back the 2009 loan?

Since 2009 only lot owners that were connected to the water system and receiving water were paying back the loan via their annual water system bill.  Regardless of the volume of water used, the cost was the same for everyone connected.  According to our bylaws, each of us has an ownership share in the water system.  Also, we are not charged for how much water we use; we are charged only for the cost of maintaining the water delivery system. Three years ago, the Board started raising the connection fee so that additional lot owners wanting to be connected would begin paying a share of the cost of paying for our 2009 loan.  The connection fee with a vault already installed is currently $5,817.

What is our current financial situation, and why is a special assessment even a current topic?

The best rough estimate for a 128,094-gallon reservoir (the minimum size required by DOH for the maximum number of Valleyhi connections) is $545,000.  We currently owe $194,385.  As of July 1, 2024, calculations by our accountant indicate we will have $114,424 on hand. These funds will go towards our monthly operating expenses, anticipated expenses for a new loan application, permits and start-up costs.  Given that the interest rates are beginning to come down a little and knowing that construction costs are only going to increase, a reservoir construction project is an issue ripe for action.  A reasonable community-wide assessment of $1300 would make this project possible soon. Once the 2009 loan is paid off, we can apply for a new low-interest loan from the WA State Drinking Water Revolving Fund.

Who will pay the assessment?

The Board sent out a survey in March asking community members to pay up front for the new reservoir.  Members were asked to choose whether only members connected should pay or whether all members should pay.  Members representing 44% of the lots in Valleyhi responded.  34% wanted all lots to pay and 10% wanted only connected lots to pay.  This was valuable information, and we appreciate the response. 

Based on the response, we learned that we need to apply for a new loan for reservoir construction.  A larger reservoir will increase fire protection in our area.  A larger reservoir will allow all lots to be connected to the water system.  More available water will increase the value of every lot, which is why all lots should contribute to the repayment of the 2009 loan and any new loan too. This is a change from the current practice.

Are there any other major issues or changes coming?

Yes, there will have to be some more changes.  At some point in the future there will have to be a charge for water usage, above and beyond paying for our water system infrastructure. The state regulations are part of this change, but equitable treatment of all lot owners is also a major factor.  It is quite likely we will have to create a tiered water fee, meaning that those who use the most water will pay a higher fee than those who use less.