Board Meeting Minutes – July 25, 2020

Call to Order:

Welcome: Darton, President

Present/Quorum: Darton, Todd, Clint, Matt, Gini, Paul, Morris (arrived at :10:45), Dave (Manager), Guest: Sheila Doane)

Consent Items

Approve – Contents and order of this Agenda: Approved

Approve – Minutes of June meeting: Approved

Information Items

Guest Speakers comments (if any): None

Board Member comments (if any): None

President’s Report — None

Manager/Operator Report (Dave)

• Dave will remain in charge of the Cross Connection Project. The board will need to help put together Flyers to educate members of this project.
• Dahle Engineering Proposal: Paul said the detail in contract proposal was very good. Believes we need to move forward with this contract. Todd noted we don’t have a line item in the budget to cover this expense because when the budget was being created we didn’t know we’d need to do this for funding of the Sandy Springs project. Matt is concerned about being able to terminate the contract if financing is a problem Matt asked how often these engineering plans need updating and if an updated plan was required for every project. Dave said he understood pans need updating every 10 years. Paul noted that we update our plan every year if there are any changes made. Todd mentioned that although technically we don’t need this formal plan for the project to happen, we do need it to get funding. Darton asked if we could get a note to the members in the August bill presenting this added expense and Dave said yes. Paul said Dahle will bill monthly so we can cancel if we don’t get funds approved.
• Todd proposed and Paul seconded the motion to move forward with this contract. A quorum with a yes vote of Darton, Paul, Clint, Gini and Todd.
• Sandy shores: Dave asked if all board members had had a chance to review the letter from Gray and Osborne presenting the bids for the project. Everyone had seen it. Darton questioned Paul on whether he thought going with the low bid would cause there to be a lot of change orders that would raise the price. Paul didn’t think so any more than any with any other contractor. He noted that Gray and Osborne has had experience with this and the other contractors and thought they did a find job. It was confirmed that once the job began the contractor was required to be done in 90 days.
• Dave said the new Generator was fully operational now.
• Dave says Kai is now certified on back flow assembly. We should add this fact to our website so our members can. use her services because otherwise they will have to hire someone off island.
• Todd said he had not been able to move ahead much with the loan financing of Sandy Shores. Chase has turned us down for a loan saying the bank is holding back on loans because of the Covid 19 situation and the bank not knowing how things will play out. Todd is more of the opinion that Chase doesn’t want to loan for 15 or 20 years when interest rates are so low.He has not heard back from US Bank. He has not had any success getting the island credit unions to be willing to see our loan request. Maybe we will need to reach out to other small banks. Paul suggested he contact Varity CU. Matt asked if any of these contractors offered financing. Dave said they wouldn’t.
• The board questioned if we could go ahead with a contract without a loan commitment. Todd thought perhaps we could go forward with a phased approach but Paul said the contractors would not want to commit to the job without guaranteed financing.
• Paul said Gray and Osborne would need to be called regarding our financing difficulties.
• Todd said we need to corner US Bank for a decision. If neither of the water district’s banks are willing to hep us finance this project we need to consider putting this information out to our members so they know what we’ve been going through with these banks who have been carrying our rather large cash accounts for many years.
• Darton suggested we go ahead with a vote on choosing a contractor anyway. We can do this by putting a clause in the contract stipulating we would not move forward with the job until the financing of $200K was lined up.
• The board has chosen Pacific Crest Construction to be the contractor on the Sandy Shores project. The motion was put forward by Darton with Todd seconding. The motion was approved by a quorum consisting of Darton, Todd, Cling, Gini and Matt.
• Dave will schedule a meeting with Warren of Gray and Osborne to get the updated contract signed.

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Committee Reports:

Finance Committee (Todd):

• Todd said the years financing has gone as planned. Our revenues from water sales are a bit lower than expected. Our expenses appear lower than budgeted primarily because we have not been billed by King County for an expected “right of way” franchise fee. We showed a profit because we received an SBA PPP loan to maintain our payroll which we did. Consequently this $22K should convert into a grant which will provide some additional funds as needed.
• The Sandy Shores system replacement plan is pretty much where we expected it to be. We haven’t spent (invested) the $100k for the filtration plant yet so it is still showing the Improvement Fund. Therefore we are showing $267K in the fund rather than $189K as expected ginghams into the new year.
• The Contingency Reserve Fund has grown because we received an SBA emergency low interest loan advance of $27,200 and a forgivable loan of $4K. The SBA provided this loan to business in case Covid 19 caused financial distress. Luckily DWA has not experienced issues. We are setting these funds aside until we know what we can do with them.
• One item worth mentioning is that we have reduced our accounts receivable by $20K. That means we have gotten people to pay their outstanding water bills! Dave has done a fabulous job gently suggesting to members that they pay up.
• Dave interrupted Todd’s presentation to ask about the financing of the Sandy Shores project. He said that although we are budgeting $500K for the project, it probably will end up costing closer to $600K when it is all done. Where will these extra funds come from? Todd said if that ends up happening we may have to shift priorities until funds become available. Gini asked about holding off on our other smaller and less urgent projects. We have the remaining DWA building upgrade and the Manzanita/Hake connection planned which could be postponed. Dave noted he will contact Carlos the contractor for the DWA building to let him know the DWA building job would be shelved until we can confirm later.
• Todd noted we want to have $230K in the bank by year end so we may need to juggle our projects.

Water Production Committee (Paul):

• There is a hot week forecast so we want to be sure our pumps and silos are ready. Dave mentioned there had been a leak so the silos had been low as a result but the leak is fixed and our water level is good again. Paul asked Dave if we were already taking water from Sandy Shores and Dave confirmed that we were.

CIP and Planning Committee

• The CIP was already covered when we were discussing the Sandy Shores project.
• Committees will have new board members: Water production will have Matt and Morris joining Dave and Paul. The finance committee will have Clint joining Todd.

Old Business / Carryover Items

No items

New Business / Discussion Items

• Darton asked who would take over the Cross Connecton program but Dave said he had a handle on it and just needed help getting info out to the community. Gini volunteered to help as needed.
• We already discussed the Sandy Shores DOH loan.
• We all agreed the Friday Letter and the monthly financial summary should be available to the members through the Dockton Water website.
• Todd wants us to learn how to update subscriber lists on the website so members can be signed up to receive specific info they are interested in.
• The By-laws need to be updated because of a mix up that occurred in the past which caused an old version to be used by mistake. Darton and Todd will correct this and present the new version to the board for approval and then provide them to the members.
• DOH webinars were attended by Clint and Todd. The consensus was that they were interesting but too complicated to justify using for our purposes. From DoH webinars: webinar on funding convinced us that getting DoH Loan is daunting, if even doable…   Webinar on Asset Management provided very interesting, though challenging tool that could help with our Water System plan.
• Marcia Horswill wants to get an update regarding the Manzanita/Hake connection. Dave said nothing had changed and he had not heard back from the landowner whose property it would need to go through. He was going to reach out to him again.
• The new board members were given some history regarding the various projects on the CIP. Darton and Dave presented info about the Pt. Piner work and it’s complexities. Dave explained the need to reestablish a through connection from Manzanita to Hake to improve the water and the flow.He explained how a previous owner reneged on an agreement to reroute the original through connection after we had installed a cap to allow him to install a septic system in it’s location. Now we are finally attempting to reestablished this through connection.
• The easement at Dockton Springs related to Nancy is an old issue that is still being fixed. It seems long ago Dockton Water drilled wells at the spring in land they though belonged to the water district. This was before we had hired a professional water manager. It turned out the wells were drilled on a neighbor’s land. We are still working on doing a lot line adjustment.
• The planting of the cedars at the Dockton Springs land has to do with having cut down alders that were threatening to fall over and destroy some of our wells. If the wells had been put out of service we would never have gotten permission from DOH to redrill in that location again. Since cutting the alders was a code violation we needed to pant more trees as mitigation per the county. This has now been done but King County has still not come out to approve the work and remove the violation from the books.
• The board has decided to keep the board meetings on the third Saturday to accommodate several board members.

Other Business

What did we decide?

• DAVE: To include an explanation of Dahle contract in August billing seeking approval for this added expense outside the budget. Change Dahle contract to include cancellation clause and then get it signed. Reach out to Manzanita property owner re through connection and then get in touch with Marcia Horswill with any news. Set up meeting after next board meeting to walk new board members around water district property. Add Kai as back flow certified to our website. Inform Carlos that DWA building job on hold.
• DARTON:
• PAUL: Contact Warren to describe funding issues and to update contract with a clause stating work would not commence until funding for $200k loan was finalized. Schedule contract signing with Pacific Crest once new contract is finalized.
• GINI:
• TODD: Explore more off island banking options and reconnect with US Bank for their decision.
• MATT:
• CLINT:
• MORRIS:

Next Board meeting: Saturday, August 22, 2020