Call to Order:
Welcome: Darton, President
Present/Quorum (yes): Darton, Todd, Clint, Matt, Gini, Paul, Dave (Manager). Guest: None
Consent Items
Approved? – Contents and order of this Agenda: Approved
Approved? – Minutes of September meeting: Approved
Information Items
Guest Speakers comments (if any): None
Board Member comments (if any): None
President’s Report —
- No report needed.
Manager/Operator Report (Dave)
- The Sandy Shores project has begun. Pacific Crest has two employees on site who are making good progress. Site is being prepared and the pond has begun to be installed. We have received our first rough bill and the formal bill will be arriving from G&O this week. This should be in the neighborhood of $46K. The work is expected to take approximately 90 days with an additional 120 days until the site is operational.
Committee Reports:
Finance Committee (Todd):
- In September we have sold more water than last year and in fact have sold almost as much as ever in a month due to more usage. Our operating income is at 29% of year total instead of 25%. This is great news because we need to get ahead early in the year because we fall behind usually in the winter and spring. Our Business operations costs are showing a bit high at present but that is because we have paid for our insurance which is by far our largest business operations expense. Our legal fees and IT costs are also a bit high for this point in the year but not too much. The legal fees relate to the KC right of way lawsuit. Business systems operations at 34% are also a bit high. Some of this is just due to stocking up on supplies that will be used throughout the year. We also bought a new printer for the office. Never-the-less we will be keeping an eye on cost trends in System operations… often it is unscheduled maintenance events that create these overruns but so far we haven’t had this to deal with. If we can weather a month or two of smooth sailing we will be back on track. Taxes are looking low but that is because we are holding funds for the eventual Right of Way tax that we aren’t paying yet. In Capital improvements fund we are starting to see some of the costs relating to the Sandy Shores Filtration project. A couple of reserve shares have become active.
- Todd presented a spread sheet showing where moneys get allocated. Of the $12, $6 is used to pay down our longstanding construction loan from the State of WA. $6 has been going into the Capital Improvement fund as a reserve for new projects. (Note: for the Filtration Plant project, about $4 of the Capital Charge will now be used to pay down the new loan from Kitsap bank. So, $2 per Share per Month will remain to accumulate in the Capital Improvement reserve fund. After the State loan is paid off, in 2025, that $6 will be available to pay into the reserve fund or to service any new debt for capital projects.)
- Todd explained that we have 4 different funds that serve different purposes: Operations, System Replacement, Capital Improvements and finally, Contingency Funds. The Contingency fund is the one fund that does not get an automatic monthly contribution. It only gets money added to it if we have extra at year end or in the current situation, due to Covid PPE money.
- Todd has closed both our Chase accounts and the funds are being transferred to the Kitsap accounts.
- We have 488 shares actually assigned at this time. We have an additional 8 shares available for owners who need them. King County has 9 shares that they will never use but for which they are paying a reserve fee for. If ever we need to come up with additional shares to sell to homeowners, we could get these shares from KC. Also, now that the Sandy Shores Filtration project is happening, we could very likely add additional shares because we’ll have more water available on an ongoing basis.
- Clint asked if Todd could describe our insurance coverage. Todd explained we have our insurance covered by a company named Grundy which specializes in utilities insurance coverage which means they understand our needs. This insurance covers typical building insurance, insurance for system leaks for which we are responsible, volunteer board member liability insurance, and insurance if we ever cannot provide water. This year our insurance expense has gone up because we upgraded our coverage. We had been very under insured!
Water Production Committee (Paul):
- No items
CIP and Planning Committee
- While the Sandy Shores Filtration project is moving forward we will not be actively pursuing other items.
Old Business / Carryover Items
- None
New Business / Discussion Items
- Dave and Paul discussed setting up a special page on our website to provide weekly updates with pictures on the Sandy Shores project. They will look into setting this up and providing the input. Todd said this could be in the form of a “page” or a “blog” but he would lean towards it being a page because that is more permanent.
- Todd thanked the board for actively using the website and entering information on it.
- Gini asked about who on the board gets notified by our website when there are comments made to the Board meeting agenda or other items because she did not get notification last month when a comment was sent. It seems the manager receives all comments and he will respond as needed, as he did in this case.
Other Business
- None
What did we decide?
- Dave: Dave and Paul are going to set up a website page for the Sandy Shores updates.
- Darton:
- Paul:
- Gini:
- Todd:
- Matt:
- Clint:
- Morris:
Correction re: the Capital Charge all shareholders pay each month. Of the $12, $6 is used to pay down our longstanding construction loan from the State of WA. $6 has been going into the Capital Improvement fund as a reserve for new projects. (Note: for the Filtration Plant project, about $4 of the Capital Charge will now be used to pay down the new loan from Kitsap bank. So, $2 per Share per Month will remain to accumulate in the Capital Improvement reserve fund. After the State loan is paid off, in 2025, that $6 will be available to pay into the reserve fund or to service any new debt for capital projects.) The reference to $6k is incorrect.