EDITORIAL: Old Enough to Change Her Name, Part Four

Read Part One

August 24, 2017

Mr. Hudson,

I am aware of your recent email to the San Juan Water Conservancy District (“SJWCD”) Board of Directors regarding “Potential Conflicts of Interest.” Please be advised that as legal counsel for SJWCD, I will look into your question to the Board and get back to you shortly. I have also advised the SJWCD Members of the Board of Directors to refrain from responding to your questions individually.

Please direct any future correspondence of a legal nature concerning SJWCD to myself or Kent Holsinger at our contact information found below.

Thank you,

Austin Rueschhoff, Attorney
Holsinger Law, LLC
Denver, Colorado 80202

According to an article written by San Juan Water Conservancy District (SJWCD) President Rod Proffitt, and published last month in the Daily Post, Mr. Proffitt hopes the Archuleta County community will vote in November to triple the amount of property taxes paid to SJWCD. He indicates that this property tax increase would provide SJWCD with somewhere in the neighborhood of $2.1 million over the next ten years.

If we want to thoroughly understand this ballot measure… well, we should probably make an effort to ‘follow the money.’

Mr. Proffitt has been working overtime, lately, to market the Dry Gulch Reservoir to Archuleta County voters. He’s additionally spent many hours traveling to Denver and elsewhere, engaging with Colorado water industry leaders and water industry attorneys. In support of these marketing efforts, he occasionally quotes the mission statement for SJWCD:

“The mission of the San Juan Water Conservancy District is to conserve, develop, utilize, and plan storage for current and future water needs, and to ensure that the water resources of the San Juan River and its tributaries, and the property and residents within the District will be benefited by our activities.”

We can certainly hope that “the property and residents within the District will be benefited by [SJWCD] activities.” But there is one person in particular who has been benefiting from SJWCD’s tax revenues. Rod Proffitt, himself.

SJWCD President Rod Proffitt, center, during his unsuccessful campaign for Archuleta County Commissioner. Also shown, on left, candidate Steve Wadley and on right, candidate Morgan Murri.

While doing some recent research into the activities of the San Juan Water Conservancy District, I came upon an interesting statement in the August 2013 Board minutes:

Disclosure of Potential Conflicts of Interest

Rod Proffitt and Carrie Weiss had previously submitted disclosures as members of the Board of Directors and entering into Services Agreements to [respectively] provide partnership and marketing services related to the Dry Gulch Reservoir Project and administrative services for the District. The Board noted, for the record, that these disclosures be restated at this time with the intent of fully complying with laws pertaining to potential conflicts.

When I asked Mr. Proffitt about these “Services Agreements,” he informed me that he’s had a contract with the District since 2012.

You can download the contract here. It reads, in part:

“It is anticipated by the Parties that the Contractor [Rod Proffitt] will travel around the state and region in performance of the Services or will participate in meetings and other marketing activities that can easily be accounted for in time increments of half-days. Therefore it is appropriate to award compensation on the basis of half-days. In consideration of the Services to be performed pursuant to this Agreement, the Principal [SJWCD] agrees to pay the Contractor at a rate of $100 per half-day of services performed.”

Seems like just an ordinary contract for services. The SJWCD Board has been paying their President, Rod Proffitt, to market and promote the Dry Gulch Reservoir project.

But there might be a little legal problem. Members of a water conservancy board of directors are prohibited, under Colorado state law, from entering into a contract with the District they direct.

Colorado Revised Statutes

Title 37 Water and Irrigation
§ 37-45-115 Organization of the board of directors

(1) Before entering upon his official duties each director shall take and subscribe to an oath before an officer authorized to administer oaths that he will support the constitutions of the United States and of the state of Colorado and will honestly, faithfully, and impartially perform the duties of his office and that he will not be interested directly or indirectly in any contract let by said district, which oath shall be filed in the office of the clerk of said court in the original case.

As I read this law, it states that Rod Proffitt cannot be interested, directly or indirectly, in any contract let by SJWCD.

Has Rod Proffitt been violating Colorado law since 2012?

Well, I don’t like to jump to conclusions. So I wrote an email to Mr. Proffitt and his board, asking about the apparent conflict between Colorado law and Mr. Proffitt’s SJWCD contract.

HI Rod, Ray, Al, John, Susan, Doug

While researching the operations of the San Juan Water Conservancy District, I happened to come across this state statute (CRS 37-45-115) which seems to indicate that a member of a Water Conservancy board of directors cannot legally have a direct or indirect interest in a contract made with the District.

However, I understand both Carrie Weiss and Rod Proffitt had such contracts with SJWCD for several years? And Rod continues to have a contract for “Services”?  I’ve attached Rod’s contract for your reference… 

That’s when I received an email from SJWCD’s attorney, Austin Rueschhoff, suggesting that I should cease corresponding with Mr. Proffitt and his board about anything of a legal nature. (See Mr. Rueschhoff’s response at the top of the page.)

I also received an email from Rod Proffitt:

Bill: Please do not contact me ever again. Take me off the affordable housing group [email list] – I no longer wish to associate with you on anything again. Austin can reply to your email below, but I have already cautioned him you will try to run up the attorney fees, so I have asked him to respond to you sparingly and only when necessary. I ask you politely to refrain from contacting any member of the board of directors.

Rod Proffitt
263 Woodsman Drive
Pagosa Springs, CO 81147

It seems that both the SJWCD President and his attorney want this particular member of the taxpaying public to refrain from talking to the members of the SJWCD Board… about financial matters… and about adherence to Colorado law?

Incidentally — and it’s probably just incidental — the San Juan Water Conservancy District has not had their bookkeeping audited since 2010, according to the Colorado Department of Local Affairs. Which means… maybe it’s up to us local taxpayers, to audit the books.

With that idea in mind, I submitted a CORA (Colorado Open Records Act) request on August 24, asking that SJWCD provide access to their bookkeeping, which are public records.  Yesterday, August 29, I met with two members of the SJWCD Board — Board Treasurer Ray Finney and Board Secretary Al Pfister — to examine the SJWCD check register.

And then, disregarding Mr. Proffit’s wish that his Board avoid talking with me, Mr. Pfister and Mr. Finney and I did in fact end up talking at some length. About Dry Gulch.

But first, let’s talk about money…

Read Part Five…

Bill Hudson

Bill Hudson founded the Pagosa Daily Post in 2004 in hopes of making a decent living writing about local politics. The hope remains.