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Dakota Ridge Board of Directors Meeting
February 7, 2024 at 8:30am via Zoom

Present: Ron Lemieux, Carrie Hayden, Holly Van Deursen, Scott Prochazka, Bill Noyes, Andrea Wilhelm (CPG)

The meeting was called to order at 8:35am after a recap of the prior evening’s neighborhood social event. The Board thanked Carrie and John Hayden for hosting. With all members present, a quorum was established.

Year to Date Financial Review
Treasurer Holly Van Deursen provided the following highlights to summarize the year-to-date financials through December which were shared with Board members on 1/17:

Net Operating Income:
• ~$17K favorable through 12/31

Operating Income/Revenue:
• Overall, revenue is ~$4000 over budget, mainly due to higher-than-budget water user fees for 1 million more billed gallons versus last year. This is somewhat offset by lower-than-budget ARC fees.

Operating Expenses (noting variances of $1000 or more):
• Legal fees -- ~$4K favorable variance due to unused legal fees, but the Association still has work to complete the covenant review effort.
• ARC fees -- ~$1000 favorable variance on fees to architects, but somewhat offset to below $1000 overall ARC variance by ARC administration.
• Road maintenance -- ~$14,000 unfavorable variance due to higher mastic use than budgeted. We will adjust for this in future budgets.
• Snow removal -- ~$2,500 unfavorable variance due to April snow. Note that the unfavorable variance is reduced from $3000 in the last report, but is likely to increase again in the March report due to snow levels and frequency.
• Sign repair -- ~$2,000 favorable variance due to minimal needs to-date.
• Water System -- $22,000 favorable variance versus ~$14k favorable variance reported last quarter. This is underpinned by favorable variances in operations, contractor, and repairs/maintenance, which is a welcome change to recent years. There is a pumphouse control relay repair that will hit the books for the next quarter report, as well as higher contractor cost as Tim is filling the tank in manual mode until repaired. This means that the variance may shrink a bit for next quarter.

Other Income:
• Capital reserve dues – show a ~$1400 unfavorable variance; this is just a matter of the way we loaded timing of payments into our budget – not an issue. At the end of December, four owners had not paid the latest dues; that now has been reduced to one.
• Interest income -- ~$7,700 favorable variance due to higher interest rate than included in the budget.

Capital:
• $238K on water system projects vs. budget of $248K
• $121K on road improvements vs. budget of $185K
• $2.3K on wildfire mitigation versus budget of $5.6K
• Total capital spend -- $362K versus budget of $439K – or a favorable variance or ~$78K

Balance Sheet:
• $384K in assets on 12/31 versus $341K last quarter and $295K in reserves which is just below the $300K minimum balance
• Money market account is $2600 above the FDIC limit, which will be addressed at the end of the fiscal year.

Andrea noted concern over an unusual past due balance of over $3K owed by the Lot 7 owners for the 4th and 1st quarter dues. Monthly statements have been emailed and opened by the owners on 10/5, 11/14, 12/13, 1/3, and 1/26 but unfortunately there is no phone number on file. A statement was also sent via USPS last week. The Board asked CPG to go ahead and start the required collections procedures via certified mail. Holly also suggested a search of whitepages.com with their address.

2024/2025 Budget Review & Approval
Andrea and Holly reviewed the draft budget with the Board for the upcoming fiscal year starting 4/1/24. The budget reflected a $517 decrease in operating dues from $2435 in the current year to $1900 in the future fiscal year. Increases were added to the line items of Water User Fees, Association Management, Insurance, Snow Removal, Street Light Electric, Water Storage Contract, Road Maintenance and Mosquito Control based on either prior year actuals or to account for general inflation. Carrie noted that DRB Architect Fees should be increased if the Association intends to re-write the Guidelines and implement construction inspections. The Board decided to re-allocate $5,000 from Legal Fees to DRB Architect Fees due to the fact the Covenant Review Committee is almost ready to present their proposed revisions to the ownership. Following the meeting, the Board also increased Association Management by 10% because it had remained static for two years and the Board felt there should be an annual escalation in line with inflation. This changed the operating dues to $1918/lot.

In the Capital portion of the budget, the Board reviewed the Reserve Plan and decided to set the Reserve Dues at $250k for the upcoming fiscal year which amounts to $3378 per lot, down from $5300 the prior year. Minor revisions were made to the Reserve Plan including:
• postponement of the chip seal project to the years 2025 and 2027 and every subsequent five years
• meter pit installations expedited to 10 per year over 6 years
• increases to wildfire mitigation on a five year cycle to account for mitigation on the heavily wooded north common parcel
• addition of a $5K placeholder for an additional parcel mailbox or mailbox cover structure (as suggested by June Winward the night prior)

The Reserve Plan shows the Association dropping below the minimum $300K balance toward the end of the time horizon covered, but the plan will be revised annually based on what is actually spent vs. forecasted.

Andrea inquired whether the Board wanted to continue to invoice dues annually vs. quarterly and they voted annually, noting that owners could have an option to set up a payment plan if necessary. With no further questions or discussion, Scott made a motion to approve the 2024/2025 budget, Bill seconded the motion and all members were in favor, noting that if necessary, changes could still be made at the next Board meeting prior to the Annual Meeting.

Water System Updates:
Andrea reported the Q4 water loss was 5.2 GPM, leaving the Association with 2024 annualized water loss of 7 GPM. The January loss was down to 1.2 GPM but could have been skewed by malfunctioning overflow check value on one of the three pumps inside of the contact basin. That pump will need to be pulled in order for the valve replacement therefore Tim Gibbons recommended waiting until spring to do so when the tank is more accessible. He has been asked to seek estimates in the meantime and reported there are a total of three pumps such that the remaining two can adequately support the HOA in the meantime. Tim also confirmed the control relay in the pumphouse was replaced by Brown’s Hill along with the Mission Control SCADA interface. Lastly, Andrea reported that she is still working with the Water Attorney, Richard Mehren on the Water Court Application to make the current conditional water rights for the water supply well absolute. The Court recently provided a list of additional information requested which the attorneys are working to provide in conjunction with Tim Gibbons and CDC. Holly asked CPG to add the various GPM and percent loss thresholds recommended by the engineers to the quarterly water loss spreadsheet. The engineers are also working on an RPF for the meter pic project, a second review of the first 10 suggested homes relevant to the minimal water loss in the vault meter, and a review of the Water CIP to see if any potential projects such as the hydrant replacements and gate valves should be expedited or moved to other years.

Road Updates:
The only topic relative to the roads that was discussed was the snow removal contract and in particular, the ongoing complaints about Sugar Ridge. Andrea noted that the owners had asked if All Weather who plows two of the three driveways could be on call as needed to clear the road if/when Native is unable to plow it in a timely fashion due to the specialized equipment required. The Board members agreed this was an ideal solution as needed or permanently but the three homeowners have been unable to agree. For now, it has been left that the HOA will pay for and/or reimburse any plows done by All Weather. There was also some discussion about whether Native was plowing later than usual and Andrea explained that none of the snow removal contracts typically stipulate a “plow by” timeframe but she would inquire with Native. She also stated that she would attempt to solicit other snow removal bids for next season. However she is somewhat doubtful as to whether any other vendors besides Inc 8 have the equipment, resources, and storage to handle the five mile road system, noting that Native plows almost all of the River Rd. subdivisions including Tree Haus, Steamboat Pines, Agate Creek, Country Green, Emerald Meadows, and Sidney Peak.

DRB Updates (None)

Covenant Review Committee Updates
Ron noted that the committee held two January meetings with Paul Sachs to review the final version of the amendments drafted by the sub-committee. The next meeting is scheduled for February 27th and from there, the Committee expects to have a draft ready for owners. Andrea was asked to start a memo to accompany the proposed amendments which would summarize the minor changes and specifically explain some of the more substantive changes. From there, an informational meeting will be scheduled for all homeowners to ask questions (potentially following the Annual Meeting or at a later date) before the ballot vote takes place.

Next Meeting Dates
The Annual Meeting was set for Monday, April 29th at 4pm via Zoom and the next Board meeting was scheduled for Tuesday, April 9th at 8:30am. CPG will send notice of both. Holly’s board seat is up for re-election and she stated that she was willing to serve again. Andrea said she would draft the committee reports for the Annual Meeting packet and Holly said she would do the Financial Report, with the goal of having a draft of the packet in time for the 4/9 Board meeting.

The meeting adjourned at 10:35am.

Recorded by,
Andrea Wilhelm
Commercial Property Group