Spring Point Homeowners Association Annual Report 2010-2011

Board of Directors

President, David Dilling, 376-4314, President@Springpt.org

Secretary, Jean S. Soderquist, 376-4190, jeanandmarv@centurytel.net

Treasurer, Mary Noesen, 376-3821, Treasurer@Springpt.org

_________________________________________________________

Director, Andy Saxe, 376-5904, saxe.andy@gmail.com

Director, Bev Polis, 376-8808, polisassociates@yahoo.com

Director, Millie Vetterlein, 376-2189, mvetr@centurytel.net

Director, Bruce Wilson, 376-2755, skycap@earthlink.net

_________________________________________________________

John Ryberg, water, 376-4871, jonwan@rockisland.com

Jack Conant, roads, 376-2451, lockpickers@rockisland.com

Barbara Bedell, President Emeritus, 376-5486, barbara447@centurytel.net

Norm Zimlich, Treasurer Emeritus, 376-6165, norm@zimlich.org

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President’s Report

July 2011

Dear Spring Point Homeowners Association Mem-bers,

The Board of Directors is pleased to present you with our an-nual report for 2010-2011. Our As-sociation is in good shape, with qui-et progress on a number of fronts. Committees have been working on Bylaws revisions and Community Beach Development. Jack Conant has continued to oversee the main-tenance of our roads, and John Ryberg has continued to administer the community water systems. Our Treasury is in good condition, and we will propose a budget for next year that is based on a continuation of current dues and water rates, and does not require any special assess-ments. There are 113 assessable parcels in Spring Point. Our gov-erning documents allow only one membership and vote for individu-als or entities that own multiple tax parcels, so there are 97 member-ships. Of the total 113 parcels, 87 are eligible to use the SPHA water supply, and 69 parcels are currently connected. At our annual meeting in 2010, we enacted a significant change in the way our Association Bylaws could be changed. Prior to then, the Bylaws could be changed by the Board, which drew its authority from the Articles of Incorporation. The Board revised

the Bylaws in April of 2010. However, the Member-ship voted to annul those revisions, and determined that Bylaws changes could only be approved by the membership. Barbara Bedell has chaired a committee to propose Bylaws revisions. That work was com-

pleted and changes to the Bylaws were proposed to the members in May and approved by mail-in votes in June. An important outcome of the review of By-laws was that Directors should be elected in a way

that would maximize the overlap of terms – with two or three new directors being elected each year. We’ve included a history of the board positions in this report. We will also propose to do a one-time alteration in the term of one of the board positions to try and recover

some of the staggering of elected positions. Separate sections are included in this report on the Roads, the Water Systems, the Filter Replace-ment Project, and developments at the Community Beach. We are also including the proposed bud-get for 2011-2012 and the agenda for the annual meeting. Business that must come before the meeting will include approval of the annual budget, carryover of surplus funds (or debts) and the issue of auditing our books. Investigations over the past several years have indicated that an independent audit would be very costly, would be extremely time consuming for the Treasurer, and would do little to assure cor-rectness. The Board will continue to recommend approval of the bud-get and carryover, and dis-approval of an audit. This annual report is intended to augment your knowledge of Association operations, but we still urge you to attend our annual meeting, scheduled for August 20, 2011, at 10 am (at the Deer Harbor Community Club). See you there!

Sincerely, Dave DillingPresident, 2010-2011

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During the past year, SPHA secured formal water withdrawal rights for use of water collected in Clyde’s Pond. We have periodically withdrawn water from Clyde’s Pond since it’s installation in the mid-1980’s. However, the water supply from Jay’s pond was generally sufficient this year, for our needs, so no water from Clyde’s pond was used. The Reverse-Os-mosis (RO) plant near the community beach was oper-ated during the fall to maintain it in good condition. About 1.75 million gallons of water was distributed during the last year, to 69 water users (although not all users consumed water in all quarters). About 2.2 mil-lion gallons of water was withdrawn from Jay’s Pond – the difference represents water used for backwash and filter-to-waste operation, and system losses. In past years, we installed features to aerate the water after it was chlorinated. This reduces the chlorination by-products which include tri-halo-meth-anes (THMs). With our system, pond, and treatment strategy, aeration is successful in reducing the THMs to levels below mandated limits. This achievement is noted in the Consumer Confidence Report you re-ceived with a recent water bill. We are also working to ensure that the level of another class of disinfection by-products, halo-acetic-acids (HAAs) also stay below Washington State DOH limits. Aeration is not as ef-fective with HAAs, but an alternative treatment, with granulated-activated-carbon (GAC) is available. Both aeration and GAC will be included in the design of the Slow Sand Filter, so that we will be able to continue to deliver treated water that is fully compliant withState regulations. We also completed aState-mandated Cross-Connection Control review. Although the RO plant wasonly operated for maintenance and preservation, some maintenanceand upgrading activi-ties were performed. This work related mostly to the boost pumps and pre-filters used to remove fine sedi-ment from seawater before it goes through the high pressure pump and RO membranes. Upon restart-ing the system this summer, a major electrical power component failed and had to be repaired. The system

is now in normal operational condition, although we don’t expect to need water production from the RO plant this summer or fall, because the pond level is higher than normal.

We have continued with design work on a fil-ter to replace the existing filter in our water treatment plant. The existing filter continues to age, and to need maintenance. Two years ago, we began a pilot test to ensure that our pond water and available filter media would produce water of suitable quality. We engaged Gray and Osborne (G&O), of Seattle, to provide engi-neering support and supervision for the pilot test, and for subsequent detailed design. The pilot test results report was submitted to the Washington State Depart-ment of Health (DOH) in December 2010, for their comments. Following receipt of DOH comments and some report revisions, it was re-submitted in March 2011 and approved by DOH in April 2011. With this approval in hand, we can proceed to develop the detailed design, construction drawings, procurement specifications, and bid packages. Construction draw-ings are needed to secure a building permit from San

Water Systems Report

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Slow Sand Filter Project

Director History and Nominations

Over the past several years, there was some confusion about proper procedure for filling vacancies in

the board when they occurred. For a considerable time, the current board operated on the premise that it

could appoint a member willing to fill a vacancy, but that the term of the appointed individual would be only

until the next annual meeting. At the annual meeting, an appointed individual could stand for election to the

board if he/she so desired. However, during the annual meeting of 2010, the membership expressed its clear

desire that appointed members to the board should fill out the complete unexpired term of the board member

they were replacing. The membership also affirmed that they wanted board members to serve for staggered

terms, so that only two or three board positions would be filled by new members at each annual meeting. To

fully understand how we arrived at our current board configuration, it has been necessary to re-construct the

history of board membership, and relate board members to specific board positions. The following table

presents the board history since 2005-2006.

Year Position 1 Position 2 Position 3 Position 4 Position 5 Position 6 Position 72005-6 Bedell (2) Cornelius (1) Zimlich (1) Ryberg (2) Lundeen (2) Gossett (2) Saxe (1)

2006-7 Bedell (2) Cornelius (1) Zimlich (2)Sutherland /

Conant (Note)Lundeen (2) Gossett (2) Saxe (1)

2007-8 Bedell (2) Cornelius (1) Zimlich (2) Dilling (1) Lundeen (2) Meek (1) Saxe (1)

2008-9 Vetterlein (1) Cornelius (2) Zimlich (2) Dilling (1) Aschoff (1) Meek (1) Saxe (2)

2009-10 Vetterlein (1)Cornelius /V/

GottmanNoesen (1) Dilling (1) Aschoff (1) Meek (1) Saxe/Wilson

2010-11 Vetterlein (1)Gottman/V/

SoderquistNoesen (1) Dilling (2) Aschoff/Polis Meek (2)/Saxe Wilson

2011-2012 Noesen (1) Dilling (2) Saxe (1)

2012-2013

2012-2014

2014-2015

Note: Records in hand are not clear with respect to Position 4 during 2006-7.

Board Positions and nominees for election at the 2011 annual meeting are:

1. Position 1 – Nominee: Milly Vetterlein. (Milly would like to run for a 2-year term, to help re-establish the

staggering of board elections.)

2. Position 2 – Nominee: Jean Soderquist

3. Position 5 – Nominee: Bev Polis

4. Position 7 – Nominee: Bruce Wilson.

Other nominations are welcome. Please send your desire and willingness to serve on the board to any

board member. Nominations will also be solicited from the floor during the annual meeting.

Juan County. The final design will be a two-train filter system with a roughing filter and a final filter in each train. We will use our existing finished water storage tanks as part of the system and will locate the new filter house on common land between Jay’s Pond and the existing storage tanks. Another small structure will be built next to the large finished water storage tank to house recirculation, chlorination, and aeration equipment. This structure will also be large enough to house equipment for a future replacement of the existing carbon-steel head tank (the large blue tank inside the main water treatment building). We are now working to finish detailed design documents. Some of these documents will be collected into packages to be used in obtaining bids from local contractors. With DOH approval, and the use of professional engineers (G&O) to provide technical oversight, we hope to be able to undertake this construction in small pieces, and avoid the cost of a general contractor. Final cost estimates can’t be developed until we get feedback from potential bidders, but we remain confident and optimistic that the SSF project can be completed within the funds accumulated in the SPHA Water account.

The rainstorm that occurred around New Year’s caused considerable damage to the North branch of the lower road, including the washout of several driveways. The repair of this damage cost about $10,000. While the rains were epic, the real problem was that several culverts were plugged and overwhelmed. It is essential that homeowners help with keeping culverts open and clear. Fortunately, Jack Conant was here when all this happened, and was able to marshal contractors to promptly fix the damage. The paved parts of the road system also suf-fered with the winter rains, resulting in areas where the edge of the chip-seal

Road Report

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Community Beach Reportpavement began to break away. There were also a number of areas where the surface developed net-works of cracks. It was judged that the cracked areas were unlikely to remain intact through another winter. Jack located a chip-seal contractor who was able to re-surface the paved road. This work included mow-ing and cleanup, and clearing of the ditches which were frequently clogged with dirt, debris, and sod. All preparation work was completed in mid-June, and a window of combined good weather and contractor availability occurred such that the new chip-seal was applied on July 1. The repair of the paved road cost a total of about $85,000, which was not in the 2010-2011 annual budget. The board elected to use a combina-tion of funds carried-over from previous year (about $45,000) and a bridging loan. Bridge loan funds were obtained from four individual members in blocks of $10,000 each. In the annual budgets for the next two years, these loans will be repaid, half in October 2011 and half in October 2012. This will reduce the end-of-year balance in the SPHA General Fund by about $45,000, but enables us to repair the road without any increase in dues or special assessment. Our coming year will include addressing potential improvements to the culverts, and regular maintenance of the un-paved roads (dust control, grading, and pot-hole fixing). We will continue to keep a supply of gravel near the water works, so if a particular pot-hole is giving you trouble, you are invited to use some of that gravel to fill it in.

At our 2010 annual meeting, members ex-pressed great enthusiasm for making improvements to the community beach area. A committee was formed headed by Don McVay and Geoff Hamill to explore safety concerns about the steep steps leading to the beach and narrow path leading to the com-munity dock. A survey was sent out to explore need and interest for improving and increasing our current kayak rack spaces. The need for additional kayak rack storage was strongly supported by current members as was removal and storage of dinghies littering the beachfront. During this review process by the Beach utilization committee, a number of trees were identi-fied that required removal for safety issues related to kayak storage, parking and beach use. A large madrona became up-rooted and tipped onto the beach, and two large alder trees near the top of the steps became up-rooted and tipped into other trees around the stairs to the beach. Those trees, along with a very un-healthy alder near the bottom of the stairs, were removed in June. In addition, material removed from the ditches in preparation for chip-sealing was deposited in a large cavity between the RO plant and the existing parking, thereby creating two additional parking spots. Work by the committee continues on the kayak rack. The former kayak rack has been updated and outfitted with new support pipes and foam wrap-ping. A new kayak rack has been designed so that an additional 21 spaces will be available to members. A database of Spring Point members interested in kayak rack spaces has been created. Board discussion has supported a decision to make spaces available on both racks for a small annual fee. Further discussion on the fee and allottment of spaces is ongoing. The commit-tee hopes to email members soon for sign up of new available kayak slots and for collection of fees.

Discussions are underway with contractors to review previous bids to improve the safety of steps leading to the beach as well as widening or re-routing the path from the parking area to the dock. We hope to have revised bids in hand shortly and be able to undertake this work before the end of the summer. We are also working to develop a good strategy for the safe storage of rowboats and dinghies.

Sand Filter Cont...

Treasurer’s Report

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General Account Year completed 6/30/2011 Fiscal Year 2010-2011 The General Fund checking account ended the year with $116,443. The Association was in receipt of dues that had been in arrears and liened. The “A” property that had been in default of payment sold and all monies due to the Association have been recovered. The Other Income sources were from interest from ho-meowner’s who paid their dues late including the “A” property that was already mentioned. The $1,000.00 Road Construction fee income was for a construction project underway in Spring Point. General Expenditures were $925.60 less than budgeted. The Certificate of Deposit for Tidelands ac-count ended the year with a balance of $2300.45. New Fiscal Year 2011/2012 Due to road maintenance costs generated in 2010/2011, but paid in 2011/12, the budgeted amount for Road Maintenance will be increased to $95,000.00. Spring Point Homeowner’s Association has secured loans from homeowner’s for the total of $40,000.00 as a bridge between the payment for this road repair and the procurement of 2011/2012 dues. The loans will be paid off in two installments, one half in 2011 and one half in 2012. With these loans, the Board proposes to maintain the annual dues at $600.00 per lot from each

of the 113 SPHA properties. This will be the sixth year for the same General dues amount. Water AccountYear completed 6/30/2011 Fiscal Year 2010-2011 The Association’s Water checking account ended the year with $168,860.00. Water user meter fees collected were $24,252.83. For next year’s water revenues, the Board is budgeting meter fees at 1 cent per gallon for 1.8 million gallons, which is the same as the previous year. Water user annual fee revenues for the 87 water eligible lots are again budgeted at $52,200.00. The water CD was cashed out and depos-ited to the checking account in anticipation of the need for the new slow sand filter system.New Fiscal Year 2011/2012 As there were no out of the ordinary expenses for the Water account, Water operations and main-tenance budget items have not been raised beyond last year’s budget. The Board continues to estimate $120,000.00 for the new slow sand filter system and Water Capital Costs have been budgeted for that amount. An annual water fee of $600.00 per water eli-gible property is proposed by the Board to cover this budget. This will be the fifth year for the same annual water fee.

BUDGET Actual BUDGET NOTES:

GENERAL ACCOUNTS 2010/2011 2010/2011 2011/2012Beginning Balance - General Checking 51,601 51,613 116,443CD -- Tidelands Reserve Account 2,276 2,276 2,300

INCOME:

Annual Dues 67,200 66,000 67,800 113x600Interest - General Account 175 175 175Road Loans 40,000Other Income 0 728Prepaid Dues 1,200Previous Year's Dues 1,200 1,800Road / Construction Fees 1,000

TOTAL INCOME: 67,375 110,303 69,775

EXPENSES:

Bank Fees -100Dock / Tidelands Costs -1,200 -216 -2,500Insurance (Non-Water Share) -2,800 -2,420 -2,800Miscellaneous -1,200 -892 -1,200Office Expenses -2,000 -877 -1,000Professional Services -6,000 -3,164 -4,000Debris Chipping Mowing -8,000 -16,768 -9,000Capital Costs -5,000 0 -5,000Road Maintenance -20,000 -20,926 -95,000Loans -24,000Taxes -100 -211 -300

TOTAL EXPENSES: -46,400 -45,474 -144,800

ENDING BALANCE - GENERAL CHECKING ACCOUNT 72,576 116,443 41,418ENDING BALANCE - TIDELANDS RESERVE ACCOUNT 2,290 2,300 2,325

CHARGES -- GENERAL ACCOUNTS 2010/2011 2010/2011 2011/2012 NOTES:

GENERAL DUES ("A" Lots) 87 x $600 87 x $600 87 x $600GENERAL DUES ("B" Lots) 25x 600 25 x 600 26x $600

BUDGET Actual BUDGET

WATER ACCOUNTS 2010/2011 2010/2011 2011/2012Beginning Balance - Water Checking 131,787 131,783 168,860CD - Water Savings 8,535 8,535

INCOME:

Interest -- Water Accounts 450 177 180Water User Annual Fees 52,200 52200 52,200 87 X $600Other Income 734Previous Year's Dues 1200 600Cashed out CD 8622Water User Meter Fees 18,500 24253 24,253 1.8M X $.01

TOTAL INCOME: 71,150 87,186 77,233

EXPENSES:

Miscellaneous -1,000 -29 -750Office Expense -500 -685 -750Pond Electricity -2,800 -1911 -2,500Pond Ops & Maintenance -11,000 -7595 -10,000R-O Electricity -2,000 -640 -1,000R-O Ops & Maintenance -5,000 -3772 -5,000Salary -19,058 -20790 -20,790Payroll Taxes -6,500 -4419 -5,000Water Share - Insurance -2,800 -2622 -2,800Taxes -100 -100 SUBTOTAL: OPERATING COSTS -50,758 -42,463 -48,690

Water Capital Costs -120,000 -7646 -120,000 Incl. SSF PilotTOTAL EXPENSES: -170,758 -50,109 -168,690

ENDING BALANCE - WATER CHECKING ACCOUNT 32,179 168860 77403ENDING BALANCE - WATER SAVINGS CD 8,580

CHARGES -- WATER ACCOUNTS 2009/10 2009/10 2010/11

ANNUAL WATER FEES ("A" Lots) 87 X $600 87 X $600 87 X $600WATER METER FEES-BUDGETED AVG/GAL 1.34 cents/gal 1 cent/gal 1 cent/gal

HSPA

2010 Annual Meeting August 20, 2011 Deer Harbor CC

September BoD Meeting September 15, 2011 Dilling Home

October BoD Meeting October 20, 2011 Dilling Home

November BoD Meeting November 17, 2011 TBA

No BoD Meeting in December

January BoD Meeting January 19, 2012 TBA

February BoD Meeting February 16, 2012 TBA

March BoD Meeting March 15, 2012 TBA

Chipper Day April 18, 2012

April BoD Meeting April 19, 2012 TBA

May BoD Meeting May 17, 2012 TBA

June BoD Meeting June 21, 2012 TBA Annual Picnic July 23, 2012 TBA

2011 Annual Meeting August 16, 2012 Deer Harbor CC

Calendar of Events 2010-2011