Draft Board Meeting Minutes – April 24, 2021

Call to Order:

Welcome: Darton, President

Present/Quorum (yes): Darton, Todd, Clint, Matt, Morris (10:15am), Gini, Paul, Dave (Manager). Guest: None

Consent Items

Approved? – Contents and order of this Agenda: Approved

Approved? – Minutes of March meeting: Approved

Information Items

Guest Speakers comments (if any): None

Board Member : None

President’s Report :

• Nothing to report.

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Manager/Operator Report (Dave):

• The 13th and 14th of May will be big days because those are the days the Sandy Shores Filtration System will become operational. We discussed how we should celebrate the event. Decided we would include an open house at the Water District building after the Annual zoom meeting to allow shareholders to look at the system.
• We discussed the paperwork for the agenda/ballot for the Board Meeting and statements that would be needed from board members who are agreeing to reapply for positions on the board.

Committee Reports:

Finance Committee (Todd):

• Todd explained how the board members could go to the Board Only portion of our website.
• Regarding the financial report: March showed good revenue. Business Operations are at 96% of budgeted. System Operations are running below budget but include $22K that will go to the small system plan. Capital Improvement Fund shows us just where we expected to be with the inflow from our $250K loan from Kitsap Bank and our costs of Capital Improvements in the Sandy Shores project.
• We used some contingency funds for a pump replacement and plan to add the buying of another backup pump in the new budget.
• Basically no surprises.
• We began our discussion of the items in the proposed Capital Budget for 2021/22. We had already discussed the Operations Budget last month. Regarding the Systems Replacement forecasts we are setting the beginning balance at just over $230K. We will continue the meter replacement program at its current rate of $3K. We had originally entered $35K for office building repairs but after discussion came to a more realistic figure of $12K for what we are planning to repair which is the soffits, gutters and facia. Unscheduled replacement costs will continue at $9K. We will be transferring $30K from Operations Fund to System Replacement Fund during the year.
• Under the Capital Improvement section of the budget we will be starting from a negative position of approx. ($43K) due to the substantial capital improvements we have undertaken this year. Our income will be budgeted at $15K from Reserve Acct charges and $65K from Capital charges. Our loan repayment will be $50K due to the addition of our new Kitsap loan. We are budgeting $25K for small additional work needed at the Sandy Shores filtration site which will include fencing and landscaping. We are budgeting $13K for fencing and signage at the Springs. We are continuing a $3K budget item for unscheduled Improvement costs. We are budgeting $6K to buy a reserve pump for the Springs.
• Our expenditures will be $91K leaving our ending fund balance at ($54,506).
• In our Contingency Reserve fund we will have approx. $104K. We are going to budget approx. $73K for the new budget because we will be paying back the EIDL covid loan which we did not need and which will be turned into a loan rather than a grant if we don’t send it back. We do not want this as a loan.
• In summary our Operating budget shows a gain of $19K. The System Replacement balance is $213K. Because our Capital Improvement Budget is a bit in the negative due to recent projects we will be planning to pause improvements for a year or two to allow our coffers to fill again. We will continue the reduced transfer of $30K to Operations during this time.
• Todd brought a motion to approve this budget plan. All approved.
• Todd brought up the issue of what a small water system such as ours should have in financial reserves. Todd brought up a discussion of the Dept of Health spread sheet we saw several months ago that details a water system’s assets and their age/purchase cost/ replacement cost etc. that help a system know where they stand as far as foreseeable expenses down the road and what the system is reasonably valued at. We discussed adding an intern to compile this data for our system at the cost of $20/hr. We believe it can be done for at or under 40 hours and it would be very useful information to have for the future for getting grants. Todd has a candidate in mind for this project and will pursue it if the board approved.
• Darton and Paul questioned whether this data mining wouldn’t be something that could be covered under the contract we have with Dahle consulting. Dave was going to take a look but from his discussion with Dahle it doesn’t seem to be.
• Motion brought to approve hiring Zachary Fernandi a recent UW graduate to compile this data, assuming we can’t get Dahle to do it under our current contract. All approved.
• Todd presented two different scenarios for a rate change. Proposal A brought reserve share holders up to the same base rate as all other share holders. and changed the price per cubic foot of water up from 1.2 to 2 cents for everyone. Proposal B would raise the reserve shares up from $17 to $27 and changed the price per cubic foot of water from 1.2 to 2.2 cents for everyone.
• After some discussion the board came to the agreement that it was most fair to have all share holders have the same base rate rather than distribute the new costs more heavily to active users. At the last rate change the reserve shares, for some reason, were not charged the same base rate.
• Darton brought a motion to vote to approve the new rate that would have all shares charged the same base rate plus the 2 cents per cubic foot of water used. All approved.

Water Production Committee (Paul):

• The main topic this month was the Dockton Springs wells that are on King County property. He has been in continued discussion with Duncan as to how to handle the issue. In conclusion they decided that it would be best to have Duncan send a letter to KC asking for an easement while providing the documentation showing our situation. The logic to this is that if we wait we will have to start all over with a new compilation of information which we have just put together for the County. At this point our documentation shows that at least 20% of the water at the Springs comes from the wells on the KC property and it will be a considerable set back to Dockton water if KC should refuse this easement.
• Sandy Shores project is just winding up and the trailer has been removed.
• Paul brought up communication he had with a neighbor in lower Dockton who was wondering if she could put together a flyer to include with our next billing notifying the Dockton Community of a Memorial Day block party. Paul will have her send over the info to Dave.
• Paul put for the motion to approve this. All approved.
• Paul suggested we install a bulletin board at the Dockton Water building so the community could post items like this Memorial Party notice.

CIP and Planning Committee

• None

Old Business / Carryover Items

• None

New Business / Discussion Items

• None

Other Business

• None

What did we decide?

• Passed Annual Budget
• Passed a rate change
• Approved motion to allow mailing re block party
• Ribbon cutting at Water District building after Zoom Annual meeting
• Hire Zachary to compile Water District data
• Paul, Todd and Darton to send candidate statement to Gini for the ballot mailing. Todd to send Gini the final Budget Proposal writeup to include in Ballot. Please send to Gini by 5/1.
• Gini to send final Shareholder Annual Meeting forms to Dave by 5/1.

Next Board meeting: May 22 , 2021