Ponderosa Community Club
BOARD MEETING MINUTES
May 12, 2012 10:30 a.m. – at the Clubhouse
Board Members Attending:
- Jeanne Whitlow – President
- Vern Little – Vice President
- Daryn Wilbur – Operations Director
- Stan Morgan – Treasurer – via Teleconference
- Mick Mitchell – Secretary
- Mary Cox – Association Manager
General Members Attending:
The meeting was called to order at 10:30.
10:30 a.m. Salute the Flags
10:32 a.m. Approval of Prior Board Meeting Minutes
Motion by Vern to approve the minutes of the April Board meeting as written. Daryn seconded. All approved.
Executive Session Report & Voting as Required
No Executive Sessions items required a vote. Discussion of archaeological firms was held.
New Board Member: Introduction of Mick Mitchell who will fill in for the remainder of Claudia’s term.
Watershed Committee Report – Fuel Reduction Program & Forestry Stewardship Program:
Doug Pendleton introduced State Department of Natural Resources guests, Matt Eberlein and Sarah Foster.
Matt outlined the Washington State DNR grant for Fuel Reduction that will completely pay for trimming and clearing brush and small trees, less than 8” in diameter, on about 30 acres of community land which has been identified as fire break areas, to lessen the effects of a fire should there be one. The value of this work is approximately $45,000. Matt provided a release form that details the prescription for trimming. This work is being done at no cost to the Ponderosa.
Should their work entail crossing onto any homeowner’s property, Doug will take the lead on coordinating communication with the resident to request permission. No work will be done on a homeowner’s property without their permission.
The State DNR manages the program from start to finish, including the mulching or chipping of debris. Project would take place this summer; probably beginning after mid-July, and would take around 6 weeks. This includes cleanup. If the fire risk becomes too high, it is possible the project would be shut down early and would be completed in the spring.
Matt also shared how individual homeowners could review their own properties for fire risk. In addition, separate from the grant, if homeowners have ladder fuels (brush or small trees) that they would like considered for this program, the homeowner will need to get contact Doug at email@example.com for more information about whether or not the property in question would qualify.
Sarah Foster shared information on the FireWise Communities Program and left a kit explaining the program and details of enrolling. The Ponderosa could participate in this recognition program as part of our fuel reduction program. Info can be found at www.firewise.org . Doug will put articles in each newsletter regarding these programs.
Audit: Agreed Upon Procedures
Mary introduced, via phone, Angela Richardson, Senior Audit Manager with CliftonLarsonAllen, independent certified accountants, who explained their report concerning the Ponderosa’s Agreed Upon Procedures.
After talking at length to Mary, Chelcie, and Stan about internal controls for Accounts Payable, Accounts Receivable and the Payroll cycle, three percent (3%) of Accounts Payable and Payroll disbursements for 2011 were reviewed to determine if the internal controls were actually being followed.
Angela reminded everyone that this was not a full-blown audit. Their focus was to look at a set group of transactions. Stan asked Angela if she was satisfied with the way the Ponderosa does business. Angela replied she was satisfied and that overall PCC is doing great. The Board will get a letter with three best practices to consider implementing to make our fine work even better.
A cover letter from the Board of Trustees will be included, at the Annual Member’s Meeting, in a packet with the 2011 Financial Review and Agreed Upon Procedures Report, both produced by CliftonLarsonAllen.
In regards to future needs, our water loan requires an A-133 audit. Stan has suggested that we set up a meeting with Angela to be sure we have all the appropriate documentation processes set up from the very beginning.
Stan’s Monthly Summary:
M&O Maintenance Account Balance - $151,623.03
M&O Reserve Account Balance - $34,013.88
Total Water Fund Account Balances - $296,165.38. During the month of April $50,415.29 was spent on the Water Mains Project
Capital Improvement Account Balance - $215,623.23
Backhoe Replacement – Total cost is under budget at $45,240.24.
Stan noted the following:
Income - up $14,000 over last month due to continued dues collected.
Expenses – In relation to the budget we are on track with expenses:
33% of year has passed. YTD expenses are at 25%.
The only call out item is Property taxes. We are over budget but that’s because we just paid the first half our yearly taxes.
Monthly Water Project financial report is in order.
Past Due Summary – Last month we had 23 members on the delinquent list and that is down to 8 this month.
Jeanne asked that we remind everyone that credit and debit cards are now being accepted for ease of payment.
Vern moved/Daryn seconded to accept the Treasurer’s Report – All approved.
Fire Fines Implementation Discussion
Daryn reported that the Fire Department has provided feedback on suggested modifications to the Operating Procedures Section 17.2 It will be distributed to Board for review and will be on June agenda.
Annual Members Meeting Structure
Discussion was held on the agenda for the annual meeting and duties were assigned.
Watershed Committee – Report given earlier by Doug. This year’s Watershed Fair will be August 25, 2012.
Social Committee – No report.
Special Board Meeting
There will be a Special Board meeting via teleconference Tuesday May 15 th, and if needed. Thursday May 17th at 7:30 PM. The purpose is to award the contract for the Water Project. Mary will send call details so members can participate.
Water Project Update
Mary reported the construction bids were opened at an open meeting in the clubhouse on May 8, 2012 at 2p.m. We received six bids for the water project construction and distributed the bid tally sheets. KRCI appears to be low bidder at $2,788,296.81. RH2 has reviewed them and provided the Board a letter recommending we award the contract to KRCI.
Mary created and distributed a spreadsheet with an analysis of “do we have enough money”, now that we have a firm construction bid. The bid was more than more than we hoped it would be: it was 2% higher than the engineer’s estimate. In recent years, similar projects have been bid 10%-30% below engineer’s estimates.
There are possible cost savings if PCC can do some of the construction tasks, rather than KRCI.
There isn’t enough money to pave roads that are currently gravel.
The State of Washington told us in order to pay back the loan of $3,500,000 we should charge members $283 so we voted it at $285. Mary ran the amortization and it’s $150,000 short, i.e. the $285 will only repay $3,350,000.
Additionally, there is the archaeological monitoring we have to do on Saddle during construction. We got three bids between $12,000 and $15,000. If they find any artifacts, the cost could go up from there.
Bottom line: the State calculation was in error so we have less money to use and costs came over the projected for contractors and archaeological people. Now if we borrow the total amount we are $11 per person per year short.
Mary reviewed the bid tally sheets and bid items. Ken Severance, water system distribution manager, joined the meeting for this discussion. There was a lengthy discussion on specific line items that might be a source of potential savings. These will be pursued.
In addition, there is a complication arising with Chelan County on our year-long plan to take out trees along Camp 12 Road. We view the tree removal as an improvement: it helps create a firebreak and removes trees that are very close to the PUD lines. The County feels about 35 of these trees have value and want the trees cruised, value determined, and some plan for compensation agreed upon before they will give us approval to move forward.
The Board had a lengthy discussion and considered many options, including the following: Do we start over next year? We can reject all the bids and advertise to a greater geographic area. But if materials costs go up, would there be any savings? Or do we try to find savings and move forward? The bids aren’t higher than our loan amount so that legally limits how much negotiating is possible with KRCI. Can we eliminate some bid items to reduce enough costs? Should we ask the members for more funding and a larger loan? How do we make sure the members are heard and that they understand the project?
We currently have $215,000 in the Capital Improvement fund. From our old water account we will need $141,000 to pay off our 2002 water loan. RH2’s engineering estimate included a 1% contingency of $125,000. This is small for a project of this size.
The Board directed Mary to work with RH2 and KRCI to try and identify as many cost savings as possible. The Board asked member Pam Nicklas to check the amortization calculation.
The Board discussed options for additional funding for the project. Overall, the Board concluded it would be most cost-effective to move forward with the water project now, because costs may be higher in the future given the improving economy. The Board thinks they did the best they could based on the information we received from our experts: engineering companies and the State of Washington. We will pursue trying to reduce costs as much as possible. If this does not result in sufficient cost savings, the Board may consider proposing to the membership that additional funding come from an increased assessment of $11, and/or use some of the Capital Improvement Reserve fund. The Board discussed that they do not want to propose increased assessments, but there may not be another option. The Board is in favor of moving ahead with the project.
Vern will prepare a draft ballot to increase the assessment by $11 per year per lot for Board review, at the May 15/May 17 Special Board Meetings.
Jeanne Whitlow’s Final Meeting
The Board expressed their thanks to Jeanne for 4.5 years of service on the Board of Trustees and the Ponderosa Community Club. Congratulations on a job well done!
12:35 p.m. ADJOURN – Moved to adjourn to Executive Session. Daryn/Vern. All approved.
12:45 p.m.RECONVENED – Discussion was held about one water project license agreement legal issue with a homeowner. Letter will be sent to this homeowner. Motion to adjourn, Vern/Daryn. Meeting adjourned.