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Dakota Ridge Homeowners Association
Board of Directors Meeting Minutes
October 14, 2024 at 2:00 PM MT via Zoom
Board Members Present: Scott Prochazka, Holly Van Deursen, Ron Lemieux, and Carrie Hayden
Others Present: Andrea Wilhelm and Selena Wathern, Commercial Property Group
The meeting was called to order at 2:02 PM.
Financial Review
Year-to-date Net Operating Income and revenue are on track to budget however an unfavorable revenue variance is expected in the next quarter due to low 3rd quarter water billing as a result of more rainfall this past summer season. It was noted that the lower billings correlate to the lowest third quarter consumption of pumped or billed gallons on record for at least 10 years and that the water loss rate decreased from 10 GPM to 6 GPM following irrigation shut down. Several operating expense accounts have significant variances, though the aggregate of favorable and unfavorable variances offset each other. The unfavorable Road Maintenance variance is driven by the unbudgeted guardrail repair and a higher than anticipated crack filling expense. Water System Repair and Maintenance is approximately $8,100 favorable to budget with the expensed cost related to the common area sinkhole repair. Interest income is $6,600 favorable to budget due to current interest rates.
Capital spending to date includes $33,000 to sealcoat Trail Ridge Road and a final cost of $12,000 to complete the cluster mailbox project in comparison to the $10,000 project budget. Wildfire Mitigation expenses are anticipated to be under $5,000 for fuel clearing on the RC-2 common parcel. Should the gate valve and fire hydrant replacement project move forward in place of the deferred water meter pit project, the total Capital spend for the 2024/2025 fiscal year would be approximately $146,000 which is $40,000 over budget. However, there are enough Capital Reserve funds on hand to complete the project as the Balance Sheet currently reflects approximately $560,000 in the Capital Reserve and the Board established minimum fund threshold is $300,000.
Water System Updates
Ron Lemieux motioned to approve the Native estimate for $102,475 to replace 5 gate valves and 5 fire hydrants at roughly. Holly Van Deursen seconded the motion, and all were unanimously in favor. The project is expected to begin Thursday October 17th, will not impact the leak testing currently underway, and is expected to be completed within a week. CDC will provide an update on the leak testing at the end of the week. So far data fluctuations have been observed when testing the light green section along Aspen Ridge Road; the engineers and water operator are experimenting with the acoustic leak detector to potentially conduct further testing on the service lines in this section. Discussion occurred regarding known leaks, loss amount calculations, and usage data trends showing leaks of metered water.
CPG completed an analysis of the cost per gallon of water pumped, billed, and lost as requested at the previous Board of Directors meeting. The analysis models the cost per gallon lost based upon two variables - Water System Operating Expenses only and Water System Operating and Capital Expenses. When calculated upon Operating Expenses only, the cost per gallon pumped is in the range of $3.00 and $5.00 over the past five years. The Operating and Capital Expense metric fluctuates significantly by year based upon what projects were completed so the Operating Expense metric was discussed to be the most accurate. The cost of loss based on Operating Expense annually is on average $20,000 per year and based on Capital and Operating Expense is in the range of $40,000 and $80,000 annually for the last five years.
Holly Van Deursen presented a rough model calculating the fiscal payoff period for the water meter pit project with initial figures showing that the installation of even 50 pits would take a significant amount of time to pay off and perhaps the project could be scaled back to half that. Discussion occurred regarding different payback scenarios based upon project modifications and concerns with socialized expenses for projects that may not benefit all homeowners. The Board of Directors collectively agreed that a further in-depth cost and risk analysis exercises should be completed to ensure fiscal efficacy and that it could be beneficial to include owners outside of the Board with specific expertise in this area. Holly Van Deursen will contact the two identified homeowners to determine their level of interest. Further questions and discussion took place regarding water tank inspections, maintenance, expected and remaining useful life, the installation of a backup tank, and ensuring adequate funds are on hand or able to be collected should a failure occur requiring full replacement. The Board asked for more time to review an email from the engineers sent just prior to the meeting related to questions about the storage tank.
Road Updates
Management will draft a survey for Board approval to poll the ownership for their thoughts on chip sealing versus asphalt replacement, using the example of the new chip seal on Mt. Werner Rd. between Tree Haus and US Highway 40, updated pricing received for another neighborhood in the area, and the financial impact of each option.
Covenant Review Committee
The Covenant Review is nearly complete and ready for a vote by the ownership. Discussion occurred regarding the final Covenant amendment package, auxiliary building provisions, factors that disqualify a homeowner from serving on the Board of Directors or a Board-appointed Committee, and the final vote for all Covenant amendments. The Board members present unanimously agreed that an owner with an uncured Covenant violation should not be allowed to serve on the Board or any committee, however they felt an adequate compromise would be to present this amendment on a separate ballot from the other proposed amendments. Ron said he would follow up with the attorney and CRC to propose this solution then the next step in the process would be to inform owners of the additional redlines incorporated since the owners’ meeting before the final ballots are emailed with a 30-day response deadline.
Design Review/Construction Updates
A new construction submittal for lot 43 was approved last week. The plans have been reviewed by the Design Review Board Architect and are fully compliant. Earthwork for the project will start as soon as possible. There will be three homes under construction at the same time – lot 15 commenced in May, lot 51 commenced in July, and lot 43 will be started as soon as possible. Holly inquired whether Carrie was feeling well enough to resume her duties on the architectural committee (where Holly was temporarily appointed in her absence) and she confirmed she was. Ron thanked Holly for her service in the interim.
Other Business
Andrea notified the Board that the permit for the fire pit on Lot 35 was correctly transferred into that owner’s name in lieu of the name/address of the neighboring owner who built it. Both owners are working together on the easement and liability issue and a final ARC submittal is expected within the week detailing the construction, materials and vegetative clearance around the pit along with an extinguishment plan.
Andrea revisited a conversation from the last meeting about maximizing investment earnings in the various bank accounts, noting that Yampa Valley Bank’s CD rates were far more competitive than Mountain Valley Bank or Alpine Bank’s rates. However, the Association already has $250K in a CDARS account through YVB earning roughly 4.5% and moving assets from Mountain Valley to Yampa Valley would result in funds being over the FDIC insured limit. Holly asked Andrea to follow up separately with she and Bill as discussed at the last meeting with the various options.
During the next budget season, Scott suggested that the Board revisit the topic of a fiscally conservative minimum Capital Reserve balance which was established by a previous Board at $300K.
The next meeting Board meeting was set for Tuesday, January 21st at 8:30am and the meeting adjourned at 3:15pm.
Recorded by,
Commercial Property Group
