Attending: Steve Smith, Myron Parry, Graig Habermann, Leslie Wagner, Julie Chan, James Jolly , J.D. Ray

 

Absent: Shawn Albert

 

Guests: Corey Johnson

 

1.The meeting at the clubhouse was called to order at 6:00 PM July 17, 2024 by President Jim Jolly.

 

2.Water Main Repair & Renovation Presentation - Corey Johnson

 

a.Corey Johnson of C Johnson Construction attended the meeting to discuss how his company and DCI could work together to replace portions of DCI’s water system.  Corey stated that his company specializes in this type of project and is working in Anacortes this summer to replace two miles of pipe at an approximate cost of $1.6 MM.  Corey also stated that he works with another community on the south end of the island to replace approximately 1000 feet of pipe per year or every other year as funds are available.

 

 

 

Corey addressed the issue of obtaining a permit to replace a section at a time in kind due to leaks or other problems.  His understanding is that we wouldn’t need a permit to do the same type of replacement.  He said we could contact the WA Department of Health, Office of Drinking water and ask the question ourselves.  Corey will also ask the water manager on a project that he working on now and let us know what he hears.

 

 

 

Corey explained that there that are different ways to approach replacing DCI’s water pipes:

 

i.DCI could have a full engineering study done and apply for WA state loans to fund the project.  The Board reviewed this approach in December 2023 and concluded it would incur costs to perform an elevation survey, reengineer the system and prompt other significant costs prior to and during construction.

 

ii.DCI could pursue multiple bids, getting an engineer to develop plans and scope of work, and asking multiple construction companies to submit a bid, having everything on a level playing field.  This approach will incur administrative and engineering costs that may not be completely recovered by having multiple bids.

 

iii.DCI could work with a company, C Johnson Construction, for example, to find the opportunities for benefit to both parties.  Corey can help DCI identify a course of action but was clear that he is not a consulting engineer.  He does know how to complete projects in Island County.

 

Corey stated that DCI’s Franchise Agreement with Island County gives DCI the right to use the County’s Right-of-Way for the installation, maintenance and repair of the water system.  Understanding how the agreement works and how it interacts with utility easements is key to the process.  Other issues include DCI’s small water system management plan and DCI’s last sanitary survey.

 

 

 

The Board thanked Corey for attending the meeting and making his presentation.

 

 

 

After discussion, JD moved that he, Graig and Steve meet with Corey to start the process.  Passed unanimously.

 

 

 

3.Minutes from 6/19/2024 Board Meeting:  Steve made a motion to approve the minutes as submitted.  Seconded by JD.  Passed unanimously.

 

4.Treasurer’s Report: Bank balance as of 6/30/2024 is $626,786 with $364,348 in the money market account, $60,136 in the checking account and $202,301 in a certificate of deposit.  See attached report.  Julie reported that she returned the CPA Group engagement letter on 6/28/2024 (copy attached). 

 

 

 

Myron asked Julie about cost for CPA to generate audited financial statements as required by RCW 64.38.045 (2).  Myron also explained that this audit may be waived if 67% of the votes cast by owners, in person or by proxy, at a meeting of the association at which a quorum is present, vote each year to waive the audit.  While the audit may be waived, it is important to know the cost of the audit to evaluate the benefit of conducting an audit.  Julie reported that The CPA Group, the company who prepared the 5/31/2024 financial statements do not perform audits and that she is contacting other providers for an accurate audit cost.  At this point, Julie estimates the cost to be between $15,000 and $20,000 annually.  Myron to send Julie a copy of the RCW requiring audits.

 

5.OLD BUSINESS

 

a.Responses to letter to the community requesting contact information: Myron reported that the letter was included with the water invoice mailed in early July and, as of this meeting, he had already received eighteen requests to be added to the contact list.

 

b.Increased chlorine testing and automation - Steve reported that he met with JJ at King Water and learned that the automated system requires internet access at the treatment building.  After discussion, JD moved to have King Water continue to monitor as required.  Jim seconded.  Passed unanimously.  Steve to review further to confirm that our understandings of the costs are correct.

 

 

 

c.Door hangers:   Graig moved to reimburse Steve for the cost of the door hangers.  JD Seconded.  Passed unanimously (with Steve’s abstention).  A supply of the hangers will be placed in the treatment building for King Water to use.

 

 

 

d.Land Trust Annual Easement Monitoring Visit: Steve reported that he met with WCLT on July 15 and accompanied them on part of their walk-through.  WCLT said they were happy with everything that they saw.  He also said he moved the bench as requested.  Steve also confirmed that power weeders and trimmers were OK to use in the Land Trust area.

 

 

 

e.Easements to Lebailly, Chambers and Moriarty properties – Steve reported that the Lebailly easement is unchanged and that Chambers and Moriarty have the revised easement paperwork from WCLT.  Once signed, the paperwork will be forwarded for DCI’s Board to review.

 

 

 

f.841 Shorecrest Drive – Steve reported that the owners now want two meters (one to the home at 841 Shorecrest and one to the lot at 845 Shorecrest) and that he had King Water install the second meter.  Steve also reported that the landowners understand that each meter will be invoiced going forward.

 

 

 

g.Dugualla District Code for 811 Tickets – Megan Hoiland, from King Water, asked about a District Code for 811 Tickets. They have been getting requests from customers about locations of DCI water mains but King Water is not being notified of any 811 Tickets because they don’t have that code for us (Steve found out that DCI’s 811 account was closed in 2008).  So, King Water cannot answer the customers’ requests.  Steve will determine what is needed to establish DCI’s account.  Her contact info is:  MHoiland@nwnaturalwaterservices.com, 360 678-5336 (see attachment.)  Graig to follow up.

 

 

 

h.Water Bill Forgiveness Request: The Board received a request from a homeowner who returned to their home in February after several weeks to find a broken pipe and the water running into the house.  The water was immediately turned off.  Steve reported that he visited the home recently and found that it was cleaned out down to the studs.  The owners are asking for a rate reduction from $8,688.60 on their April invoice to $150, their usual usage rate.  After discussion, the Board suggested that the homeowner submit the amount invoiced as part of their homeowner’s insurance claim.  The Board is open to reviewing the request again, if necessary, following the response from the insurance company to the claim.  Steve to contact the homeowner. 7/17 update: Homeowner reported that they had submitted the water invoice to their insurance company but had not received a reply.

 

 

 

i.DCI Property tax exemption renewal– Julie reported that the renewal was paid and DCI is up to date.

 

 

 

j.625 E Maplewood Loop - request for information regarding new water service.  Steve reported that King Water has been asked to look for the connection point.  More to follow.

 

 

 

k.631 E Maplewood Loop – while looking into the request for 625 E Maplewood Loop, Steve discovered there was no meter installed on 631 Maplewood Loop (purchased by current owners 2/12/2023).  Fortunately, the owners have been receiving and paying their quarterly water bill that has consistently been invoiced at the base rate.  Steve spoke with Nate with King Water to get a meter installed.  More to follow.

 

 

 

l.Meters missing in the community: The Board discussed that the process of responding to requests for water service through installing the water meter then beginning to read the meter and issue water invoices does not work smoothly.  Steve to look into how many meters are we missing in the community.  Myron to request July meter readings in excel format from King Water and forward to Steve.

 

 

 

m.The Board discussed planning for the Annual Meeting.  At this point, there is little support for providing a meal following the meeting.  The Board also considered providing beverages and snacks following the meeting.  Myron reported that he would need several people to help with quorum activities and that he will have more information at the next Board Meeting.

 

 

 

Dates for the coming Board and Annual Meetings:

 

7/17/2024 Board Meeting (third Wednesday of the month)

 

8/21/2024 Board Meeting

 

8/22/2024 Last day to mail annual meeting notice and other documents to Members (must mail thirty days prior to the Annual Meeting)

 

9/18/2024 Board Meeting

 

9/21/2024 Annual Meeting (third Saturday in September)

 

 

 

Myron to send DRAFT meeting agenda to Board members.

 

 

 

n.Changes to By-Laws – Myron forwarded a draft of the changes from Matt Walker to the Board Members on July 11 and asked them to be ready to discuss the changes at this meeting.  He also forwarded the most recent version of the changes on July 15th.  Myron also sent a draft cover letter to the Members regarding the changes on July 11 and 15.

 

 

 

Myron explained that the process of amending the By-Laws started when he was working with Mark Van Wyngarden to file the 2024 Annual Report with the WA Secretary of State.  This process is further explained in the draft letter to Members regarding the By-Law changes.  The Board discussed the process and the draft letter, resulting in changes to the letter.

 

 

 

Myron then reported that Matthew Walker stated that DCI is governed by, in order:

 

i.DCI Articles of Incorporation

 

ii.DCI By-Laws

 

iii.Homeowners Associations RCW 64.38

 

iv.Washington Non-profit Corporation Act RCW 24.03A

 

v.DCI BURs

 

Given that both of the RCW’s were recently updated, Mr. Walker suggested that we update DCI’s By-Laws to reflect both of these new laws.  After discussion, Myron moved to approve the amendments recommended by Matthew Walker and present the amended By-Laws to the Members at the 9/21/2024 Annual Members meeting for their approval.  Graig seconded.  Passed unanimously

 

6.NEW BUSINESS

 

 

 

a.Water meter but not being billed on Bay Front property – more to follow.

 

 

 

b.Recycle pump ruined during water outage to repair leak at 841 Shorecrest

 

 

 

King Water told no one that they had turned off the water.  Steve asked King if they would pay to replace the pump.  Response pending.  JJ is coming to Coupeville next week.  Steve, JD and Graig to follow up Monday at 10 AM.

 

 

 

c.Windermere proposal to develop a current list of lot owners and provide mailing services for September’s Annual Meeting.: Myron explained that the advantage to this service is that future Boards will have consistent access to the current list of lot owners and, at a minimum, have a resource to help manage the association.  Windermere charges a one-time onboarding cost of $1200 which covers the DCI’s setup in their AppFolio system that maintains the current list of lot owners and provides additional services as requested by the Board.  These services may incur additional costs and can include a dashboard available to Board Members (that includes financial reporting services, clubhouse reservations, water invoicing, assessment invoicing and more).  Myron also reported that Sierra HOA recently moved many of their services from King Water to Windermere and saved money.  For comparison purposes:

 

 

 

ServiceNW Natural Water (1)Windermere (2)

 

Office labor$58 per hour$50 per hour

 

PostageCost + 10%Cost

 

Onboarding cost0$1200

 

1 – from 12/4/2023 letter

 

2 – from 7/9/2024 proposal attached

 

 

 

Myron moved to accept this proposal.  JD seconded.  Passed unanimously

 

 

 

d.Reserve study: Myron explained that RCW 64.38.065, 64.38.070, 64.38.080 and 64.38. 90 and more apply, encouraging DCI to have a reserve study performed and periodically updated.  In general, a reserve study would identify the financial reserves necessary to fund major maintenance, repair, and replacement of common elements, including elements that will require major maintenance, repair, or replacement within thirty years.  After discussion, the Board decided to find out more about reserve studies and the cost to prepare one.  The Board also considered separating the reserve requirements for the water system from the reserve requirements for community assets.  Myron to provide RCW 34.38 and a sample reserve study to the Board Members.  Steve to contact the company that prepared the sample study.

 

 

 

e.Maintenance around the boat ramp area:  Board Members expressed concern that the boat ramp area was not being mowed.  Myron reported that Steve Hucke has mowed the grass and kept the blackberries at bay for the past several years and that Steve is now in the process of moving from the community.  Julie suggested that we add maintenance of the boat launch area to the landscaping contract for the other community properties and will ask for the contract from the company.

 

 

 

f.Julie presented the operating budget for the twelve months ending 5/31/2025.  Revenue will mirror past years and expenses will increase due to King Water rate increases, especially for water management.  Water billing services and book keeping services also increased.  Repairs are forecast to be the same as last year.  JD moved we present this budget at the Annual Meeting and include $4000 additional revenue.  Jim seconded.  Passed unanimously.  Julie to write points to discuss when presenting to the Members.

 

 

 

g.Steve moved that we look into moving water system administrative functions from King Water to Windermere. (JD seconded).  Passed unanimously. 

 

 

 

7.Visitor comment:

 

8.Executive Session (Board Members Only):

 

 

 

9.Next Meeting: Wednesday, August 21, 2024 at 6:00 PM.

 

10.Adjournment: 8:53 PM.

 

Respectfully submitted, Myron Parry.