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Dakota Ridge Board of Directors Meeting
January 19, 2021 at 8:00am via Zoom

Present: Sarah Jones, Ron Lemieux, Holly Van Deursen, and Jim Lob
Others Present: Mary Andre (CDC), Andrea Wilhelm and Emily Conkling (Commercial Property Group)

Sarah called the meeting to order at 8:01am. Andrea briefly gave an overview of the process for the 2020 Water System Improvements, supplied by Native Excavating. She asked Mary to provide any additional information about the bid process to the Board.

CIP, Bid Updates, Water Loss Summary/ Recommendations - CDC

Mary began by stressing that it’s important to respect the bidding process in that contractors put a lot of time into their bids. If you pass over and/or go back to bid, you potentially compromise the integrity of the bid without good reason to do so. If a public bid is now desired, the project that Native previously bid would need to be changed in some manner since the numbers have already been shared with Board members. Going back in time, Mary noted the design documents were originally presented to Native and Duckels for a private bid process per Medora’s direction. Native asked for some bid changes to take into account the asphalt repairs and some other line items while Duckels elected to pass on bidding. CDC recently asked Duckels if they would like to rebid considering the timing has changed and they again declined to bid due to their schedule. Holly questioned how the Board can be confident Native’s bid is a fair bid. Holly also questioned whether it reflects an “all-in” cost to get the project completed. Mary confirmed that she did feel Native bid the project in a competitive environment and that Matt’s cost analysis provided evidence the unit prices were in market range. Mary also confirmed this bid is representative of the full picture – CDC originally thought the asphalt would be handled by another contractor, whereas now it is included in Native’s bid. Holly questioned the $203k revised bid total compared to PY estimated cost of $109k (where $30k has been spent). Andrea pointed to the $75k asphalt being the difference and further highlighted that this amount is still a bit of an unknown. Jim brought up the general question of the overall water loss issue and asked whether the project being discussed will fix that issue. Mary noted that the DIP replacement is intended to address one vulnerability of the system (known from past experience) but it likely will not fix all of the water loss issues.

Holly asked Mary to help tie the revised CIP to the previous version. Mary noted she stripped three years off (historical data from 2018-2020) and added three years of projections (2028-2030) to the end. She further explained that completed projects were removed and some projects listed as “future potential needs” on the previous version were moved into the end of the extended 10-year forecast. She stressed the two projects that would be helpful – the first being smart meters because they would provide real time continuous flow readings and track the sum of all meters against water plant production. She said smart meters wouldn’t tell us where the leaks are but they would give us real-time data without calibration issues along with alerts when usage suddenly changes in order to detect leaks earlier. Holly asked about having pressure meters at the trunk lines to which Mary confirmed Native is adding two pressure loggers (one to each pressure zone). Once those are in place and if smart meters were installed, areas of concern could be isolated to one area/region. Acoustic leak testing would then have to be employed to further investigate exact locations.

Next, Mary reported that the larger PRVs in vaults 2 and 3 were not working correctly and were recently replaced. She recommends going forward with replacing all of the large PRVs. There was also a pressure relief valve (that dumps water when there is a higher pressure) which had failed and was thus leaking continuously. That valve has been fixed. It was discussed that with these additions, data can now be collected for a period of time, downloaded and analyzed which will show trending of pressure, and will give an indication of how frequently the valve is needing to open. Holly questioned the cost of a flow meter on the vaults to which Mary noted the cost would not be substantial and would allow for better real-time data. Sarah questioned if there were other steps between the DIP replacements, the PRV repairs, and the smart meter installations. Mary responded that the smart meter installations would be the next logical step and that upon installation at the households, it would be a good time for the plumber to listen to the water and identify potential leaks. The association could always hold open the option to put flow meters in after all that is done. As an alternative to the plumber listening at the household, Mary noted acoustic leakage testing could be performed at the service lines.

Mary noted how far DRHOA has come since the 2006 plan was created (26% vs 81% loss per month). Sarah reminded the Board that they have been trying to reduce the number of variables, address one at a time, and take the next steps which can’t happen all at once. In general, the Board seemed to feel it would be beneficial to pursue a bid for leak detection in 2021. Mary noted that DRHOA used this method once in years past and Native dug up several spots where potential leaks were identified but didn’t find anything. However, she stated that it has still been an effective method for identifying leaks in other water systems/HOAs. Sarah questioned if it would be helpful to do the acoustic testing before the DIP replacement and possibly reduce the amount of potholing to which Mary noted it would. Holly also told Mary the Board is counting on CDC to keep updated water system drawings throughout these various stages of repairs and improvements.

To move forward, the Board thanked Mary for her time so she could drop off the call. Holly noted she would rather have a competitive bid for the DIP/ARV project slated for 2021 but appreciated CDC’s cost-analysis of Native’s bid. Jim said he has little confidence in CDC because they still don’t know where the DIP is located. Andrea noted this is not a reflection of CDC as they didn’t create the as-built drawings and weren’t involved when the system was built. Both Ron and Jim expressed concern about the lack of information regarding the full extent of the problems DRHOA is facing with the water system, leaving the association without the ability to create a comprehensive plan for addressing and resolving those problems. Ron felt the current approach followed by CDC was too reactionary (putting band-aids on leaks as they arise) instead of determining what needs to be done to eliminate the 20-40% water loss we consistently experience. After further discussion of how to proceed, the Board asked CPG to get estimates on what it would cost to have another engineering firm review the CIP recommendations in conjunction with the work that has been done to date and the current water loss numbers. The goal would be to either substantiate CDC’s recommendations to address the water loss issue and projected spending or see if other recommendations are suggested to get to the root of the water loss issue. The Board voted to hold off on awarding the Native Bid to see if this review could be done by end of February.

The Board then discussed the $500k cost of the additional storage tank as presented on the revised CIP and Holly noted she would like to scrutinize whether another tank of that size is truly needed before adding it to the CIP. While it would be helpful to have that backup during times of interruption, the current tank could potentially service the HOA for a few days depending on season and homeowner consumption.

Financial Update and 21/22 Budget Review

Holly provided an update on financials, noting NOI is within $500 of budget. Favorable variances greater than $1k relate to the following: road maintenance, snow removal, and wildfire mitigation. There were unfavorable variances greater than $1K for landscaping and sign installation/repair due to the September storm. On the Balance Sheet, Holly noted assets are up $100k from the prior year and that all bank accounts are being managed within FDIC limits. Assets are at $430k compared to the minimum desired balance of $300k. In regards to capital projects, DRHOA underspent on road improvements by $11k and overspent (by choice) on miscellaneous (for the mailboxes) by $11k. Holly noted the HOA assesses $196,100 in reserve dues each year and tries to balance that with their capital spend. The annual budget and approved CIP are posted on the website if homeowners have questions. Holly noted that if/when an updated version of the “Sources & Uses of Capital” spreadsheet is shared with homeowners, she would prefer omitting numbers past the original 2027 until we have an updated road report from NWCC to update 2028-2030. The Board agreed.

With limited time, there was a brief review of the proposed budget for next year which Holly noted to be pretty non-controversial. Andrea inquired whether the Board wanted Bruce Thompson to continue reading water meters monthly and all agreed yes. She also asked if they would like to continue with the $16k annual transfer to reserves for water system expenses. The Board agreed to leave it in the 2021/2022 budget, but felt it should probably be narrowed down in the future so that operating income is closer to zero. It was noted that the final budget will be revisited/approved as the annual meeting date approaches and the yearend forecast is updated.

Road Update

Ron mentioned to the Board that his son, a civil transportation infrastructure engineer (i.e. he builds roads), pointed out several sections of the road with significant issues (i.e. foundation/substructure) where only a few of those had been identified by spray paint as needing attention. Holly noted we should be looking at the state of the roads and spread that work out over time so that the expense can be reasonably matched to the reserve assessments – stressing that it doesn’t make sense to do it all in one year. The Board discussed whether or not they feel comfortable that their vendor is on top of the road issues or if this is another area where they may need a second opinion. They further discussed that it would be helpful to get NWCC in touch with the vendor conducting the road repairs this summer to ensure all issues are being addressed. It was noted that the NWCC road report will be updated in 2022 and the deterioration of the road base is one area for concern.

The next Board meeting was scheduled for April 13th at 8:30am with the annual meeting scheduled for May 18th at 4pm.

With no further business, the meeting was adjourned at 9:57am.

Recorded by,
Emily Conkling
Commercial Property Group