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Dakota Ridge Board of Directors Meeting Minutes
January 18, 2022 at 8:30am via Zoom
Present: Sarah Jones, Ron Lemieux, Holly Van Deursen, Jim Lob
Others Present: Andrea Wilhelm, Commercial Property Group & Matt Mielke, Civil Design Consultants

Andrea called the meeting to order at 8:35am and introduced Matt from CDC as first on the agenda due to his time constraints. She summarized some of the questions previously circulated by the Board via email. The home smart meter installations were all completed in October, however the November and December water loss numbers are even higher than a year ago during the same months. Matt started with a summary of steps and projects completed to date in an effort to narrow down the question of what is actually causing the water loss:

1. The chlorine contact basin installed in 2018 was investigated - the level sensors were checked, the system was leak tested, and the mag meter was calibrated and verified against manual readings.
2. In the summer of 2021, Native Excavating installed a flow meter in PRV 1 where readings can be indirectly compared to the flow meter from the pumphouse throughout a 2,400 ft long section of ductile iron piping which was originally suspect. Preliminary Nov and Dec readings show only a 4-12% loss in that section after the vault readings are combined with readings from the six homes using water prior to the vault.
3. Native also excavated two areas of DIP water line for the Ductile Iron Pipe Research Association to test this past summer. The 10/25/21 DIPRA report indicates the pipe was in “excellent condition” at the first test site and “very good condition” at the second test site with no significant signs of corrosion.
4. After a second opinion on the water loss issue from a Denver-based water engineer, smart water meters were installed in all 60 homes in Dakota Ridge last fall in order to ensure there was not a metering issue and to provide real time data for ongoing analysis of usage, loss, and leaks.

Matt reminded the board of the other section of DIP along Aspen Ridge Rd. that is considered high risk due to its extensive history of leaks. CDC did the design work and put it out to bid with Native last spring but ended up pulling it from the project scope this year in lieu of the smart meter installations. He said this area was still suspect and due to the corrosivity of the soil, pinhole leaks could eventually evolve into pencil sized leaks that might explain current loss rates.

Secondly, he pointed out the possibility of leaks in the copper service lines and said that meters and meter pits at the curb stops are the only way to ensure water is not lost or leaking prior to the house. He went on to explain that any service lines 100ft or longer are typically fit together with compression couplers and rubber gaskets that could easily be failing. The plumber installing the smart meters did utilize the acoustic leak detection tool but unfortunately did not uncover any leaks, only a few hose bibs prior to the meters.

Lastly, Matt revisited the idea of engaging a professional acoustic leak detection company to explore either the main lines, suspect DIP area, and/or service lines. Ultimately the Board asked him to solicit estimates for surveying all pipes in the water system vs. just the problematic sections such as DIP and service lines of 100ft or longer. The Board also asked Matt to look into the purpose/function of the pond on Sugar Ridge Road near lot 68.

After Matt left the meeting, there was some discussion among the Board about the cost per gallon of lost water vs. the cost to continue trying to locate the source of the loss. It was also agreed there was still value in replacing the remaining section of DIP on Aspen Ridge Rd. with a history of leaks in order to maintain overall system integrity and to avoid the even higher repair costs of a major failure along that section. The Source and Uses of Capital document was briefly revisited which shows this project is currently earmarked for 2024 but could potentially be pushed sooner depending on road expenditures in 2022 and 2023.

UYWCD Contract Amendment
Andrea circulated a legal memo the day prior from the Dakota Ridge water attorneys Moses, Wittemyer, Harrison & Woodruff, P.C. The memo suggested some additional questions that could be asked of the UYWCD, but ultimately indicated the two options are: 1) to sign the amendment at $82/acre foot with annual CPI increases or; 2) choose not to sign it and revert to pricing from the original agreement at $90/acre foot this year, then subject to annual variability “based on operations, maintenance, and repair costs.” Sarah said she would email Andy Rossi with the questions from the attorneys, but all of the board members present felt that signing the proposed amendment (Option 1) was the best choice and the amendment should be executed.

Financial Report - Holly
Andrea screen shared the 4th quarter financial packet and Holly provided the following highlights indicating the association is in a good financial position and running ahead of the operating budget:
Operating Budget YTD
• Revenue is about $24,000 over budget, primarily due to water user fees. Annual dues have been collected from all owners.
• Operating expenses overall are $$3600 over budget. Items with a greater than $1K variance are:
o Legal fees: $2100 over annual budget
o ARC admin fees: $1400 over annual budget
o Road maintenance: $6200 over budget, as agreed this summer
o Snow removal: $1600 under annual budget
o Sign repair: $1,300 over budget due to three damaged signs
o Wildfire mitigation: no consulting fees this year, all tree removal was capitalized
o Water system operations: $1500 over budget
o Water system repair/maintenance: $5700 under budget
Balance Sheet
• Capital reserve funds total $390,000 versus the Board adopted guideline of at least $300,000
• Funds are $2000 over the FDIC insured limit of $250,000 at Yampa Valley Bank. CPG can rebalance those funds without exceeding that limit at Mountain Valley Bank.
Capex
• Capex spent to date is $193,000 versus a plan of $155,300. By category:
o Water system $162,000 vs. plan of $150,000
o Road improvements/patches: $25,000 vs plan of $0
o Wildfire mitigation: $4,600 vs. plan of $4000
o Sign replacement: $2,100 vs plan of $0

There were no questions about the financial statements, but Andrea did indicate she had not yet received the December CDC invoice, expected to be a few thousand dollars.

Roads
Andrea reported that she is still waiting on NWCC’s road report from the October inspection of Upper Trail Ridge Rd. The Board asked if the full update to the 2019 NWCC road report would be completed by the date of the annual meeting and Andrea said she would work on that with Brian but it could be dependent on the timing of snow melt and spring drainage. Holly volunteered to temporarily be the Board contact for roads after Carrie’s recent resignation.

Covenant Review Committee
In light of her expiring Board seat, Sarah volunteered to steer the Covenant Review Committee. Andrea provided a list of the seven homeowners who had volunteered for the committee and Ron also said he would participate, although his availability is limited through April 15th. Next steps were discussed including a kick-off meeting where members would be asked to familiarize themselves with the current covenants prior to the meeting; the job description, goals and process would also be reviewed at the beginning of the meeting. Within the first 2-3 meetings, the committee will hopefully formalize the next steps necessary to flush out a list of potential amendment topics with input from owners. Additional surveys or other data collection methods should indicate whether there is a majority interest in making specific revisions by the end of March or early April. At that point, the Board will decide whether to devote funds in the 2022/2023 operating budget towards legal engagement to draft the amendment language, ballots, and procedural communication Andrea also reminded the Board that the Design Guidelines may need to be updated concurrently with the Covenants if certain amendments create inconsistencies between the two documents. In order to proceed in the most efficient way possible, she suggested the Review Committee focus solely on the Covenants since the Board has the authority to change guidelines with 30 days notice.

Next Meeting Dates
The following dates were selected for additional meetings:
• Annual Meeting: May 5th at 4pm
• Board Meeting for Budget Approval and Annual Meeting Planning: March 22nd at 8:30am
• Covenant Review Committee Kick Off Meeting Options: January 27th at 11am or January 25th or 28th at 8:30am

Board Elections
Andrea reminded the Board that due to Carrie’s resignation, the Board needs to appoint her replacement for the term extending through 2023. She also reminded them that Sarah, Jim, and Holly’s seat are all up for election this year. Sarah has served her maximum limit of three terms and will need to be replaced by someone else for a three year term. Jim is up for re-election for a three year term. Holly is up for re-election for the remaining two years of her current term since a quorum was not attained at last year’s meeting. Both Holly and Jim are willing to serve again and both Sarah and Jim said they would reach out to other homeowners regarding their potential interest in being nominated for the two open board seats.

Other Business
Andrea left the meeting at 10:30am, but the Board members stayed on Zoom for a few minutes to discuss CPG’s request for an increase in management fees based on a market study recently submitted to the Board. After consideration of the market study and a discussion between the Board members, the Board unanimously approved a management company fee increase in the 2022/2023 budget to $350/lot. This rate is acceptable to CPG and compares very favorably with rates paid by similarly situated HOAs in the area.

The meeting was adjourned by 10:50am.

Recorded by,
Andrea Wilhelm
Commercial Property Group