Annual Report 2012-2013 - Spring Point Homeowners Association

Spring Point Homeowners Association
Annual Report
2012-2013

President’s Report
July 2013
Dear Members,
The Board of Directors is pleased to present you with our
annual report for 2012-2013. We have quite a bit to report,
and most of it is good news. Our Association is in good shape.
Over the past year we have made additional improvements at
the community beach, maintained our existing roads and water
system, and entered the construction phase of a new filter
system for the community water works. Other changes are
being made to the water system to reduce its potential fault
modes and assure continued compliance with DOH standards
for drinking water. Our treasury continues to be in good
shape, and we are pleased to propose a budget for the coming
year that is based on a continuation of current dues and water
rates. The slow sand filter project is costing more than expected,
and we are able to foresee a cash flow problem, similar
to the problem we had with the chip seal renewal in 2011.
We have borrowed money from members to be able to complete
the project in the coming fall.
At our last annual meeting, the members directed the
Board, with the assistance of a committee of volunteers, to
create a longer term plan for maintenance and development
of Spring Point facilities. That plan was sent to members in
June. The long term plan develops a basis for the current
dues, and also examines long term maintenance and development
issues. We’re happy to report that the buried water
distribution piping is likely to be serviceable for another 20 to
40 years. The plan develops several proposals for near term
action, including beach parking, dock and float repair/
replacement, and improvements to the reverse-osmosis water
system. The Board believes these actions can be undertaken
within the current general and water dues. We plan to propose
these projects at this year’s annual meeting, and also to
propose a plan to apply chip-seal paving to Oak Lane and the
lower part of Spring Point Road. This road project cannot be
undertaken within budgets based on current dues. If the
members agree to the paving proposal, we must also develop
a method for financing it. The Board will propose a special
assessment.
During May of this year, Spring Point and members of
the larger Deer Harbor Community took part in a community
fire drill. This drill included a mock fire at the McVay’s property,
and a mock evacuation of Spring Point residents. Some
individuals were evacuated from the community beach and
dock. The drill produced a lot of valuable information – including
the inability of Fire Department personnel to communicate
via 2-way radio from within Spring Point. The most
important lesson from this drill is that we are at significant risk
in Spring Point. If a major disaster occurs, we are largely on
our own, and we need to continue to do everything possible
to reduce our risks – especially from fire.
As occurs every year, we will ask the annual meeting
attendees to approve the 2013-2014 Budget, authorize carryover
of funds, and to agree not to perform an audit. We will
also ask the meeting for discussion and a vote on the proposals
developed in the long term plan. If the meeting agrees
to proceed with the paving project, and to a special assessment
as the preferred funding method, we will need to have a
special assessment referendum, which will probably require
member voting by mail.
This annual report and our website are intended to augment
your knowledge of Association operations, but we still
urge you to attend our annual meeting, scheduled for Saturday,
August 17 (10am, at the Deer Harbor Community Club).
See you there!
Sincerely,
Dave Dilling
President, 2012-2013

Director History and Nominations
The following table presents the board history since 2006-2007. Heavy lines indicate the start/end of a 3 year term.
Year Position 1 Position 2 Position 3 Position 4 Position 5 Position 6 Position 7
2006-2007 Bedell (2) Cornelius (1) Zimlich (2) Sutherland /
Conant (Note)
Lundeen (2) Gossett (2) Saxe (1)
2007-2008 Bedell (2) Cornelius (1) Zimlich (2) Dilling (1) Lundeen (2) Meek (1) Saxe (1)
2008-2009 Vetterlein (1) Cornelius (2) Zimlich (2) Dilling (1) Aschoff (1) Meek (1) Saxe (2)
2009-2010 Vetterlein (1) Cornelius /V/
Gottman
2010-2011 Vetterlein (1) Gottman/V/
Soderquist
Noesen (1) Dilling (1) Aschoff (1) Meek (1) Saxe/Wilson
Noesen (1) Dilling (2) Aschoff/Polis Meek (2)/Saxe Wilson
2011-2012 Vetterlein* Soderquist Noesen (1) Dilling (2) Polis Saxe (1) Wilson (2)
2012-2013 Vetterlein Soderquist Goodhart Dilling (2) Polis Saxe (1) Wilson/
Golding
2013-2014 ** Soderquist Goodhart Polis Golding
2014-2015 Goodhart
2015-2016
2016-2017
Note: * Two year term, to re-establish the stagger in Board position terms.
Board Positions and nominees for election at the 2013 annual meeting are:
1. Position 1 – Nominee: Milly Vetterlein. (**Milly was elected to a two year term in August, 2011, but is willing to
serve for one more year.)
2. Position 4 – Nominee: Will Gossett
3. Position 6 – Nominee: Andy Saxe
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.

Water Report
During the past year, the Association continued to provide
treated water to eligible members. The water produced
met all DOH standards, including limits on tri-halo-methanes
(THMs) and other disinfection by-products. A consumer confidence
report for 2012, required by DOH, was completed and
distributed. SPHA delivered approximately 1.9 million gallons
to households connected to the system.
In 2012, we have been able to meet all water demands by
treating water captured in Jay’s Pond. As was the case in 2011,
it was not necessary to use our right to withdraw water from
Clyde’s pond or to use the RO plant to meet members’ demand.
The RO plant was operated intermittently during the
summer to keep it in working order. Our system losses, including
filter backwashing and “filter-to-waste” operation were
about 10%. These losses should reduce significantly when the
new slow sand filter is operational.
We are now well along with the construction of a new
slow sand filter. At this writing, about 80% of the concrete
work is done on the new SSF building, the new raw water line
has been laid, and the new pump-house/aerator-house is completed
and ready for the installation of equipment. The existing
water system must be kept in operation while we transition
to the new system, so it has sometimes been necessary to
install extra valves and pipe connections. The new filter should
be fully operational by early fall, when we will enter an operating
mode in which we filter pond water in the SSF, and then
flow it to the existing filter. Once the new system is fully tested
and accepted, we will route filtered water directly to the
storage tanks, and bypass and decommission the old filter.
The cost of the project was estimated last year at about
$192,000. However, we have had some cost overrun, and we
now project the completed cost at about $235,000. To allow
this expenditure without any change in dues, we have borrowed
money (from SPHA members) for a short term. We
should be able to pay back these loans in 2014 and 2015. The
revised cost of the SSF project and the loans obtained to finance
it are reflected in the proposed annual budget included
in this report.
Last year, there was some concern that we should be
planning for the replacement of our buried distribution piping.
Research into the expected life of our piping (which is glued
PVC) indicates that the piping should have a lifetime of 60 to
80 years. Most of our piping was installed in the 1970s and
1980s, so should have many more years of service. The long
term plan, sent to members in June, reflects the expectation
that it will not be necessary to start replacing piping until
about 2030 or later.

Road Report
The chip-seal applied to the paved Spring Point Roads in
2011 is holding up nicely, with no special maintenance needs.
We will probably need to re-apply chip seal to paved roads
(about 1.4 miles) in 2018 or 2019. The unpaved roads received
their usual grading and gravel replacement in April this year,
and will again receive a coating of dust-tack during the summer.
This maintenance work is usually contracted to Island
Excavators and costs about $10,000 per year.
At our Annual Meeting in 2012, the Board tabled a proposal
to undertake a program to pave Oak Lane and the lower
part of Spring Point Road. However, that proposal was not
acted upon because the members in attendance felt that the
longer term maintenance needs should be assessed, and a
paving program should not be undertaken without first examining
the possible need to replace our water distribution piping.
The expected lifetime of the water piping was researched,
and a long term plan developed and sent to the membership.
That plan concludes that there is no interference between
road paving and water distribution pipe replacement, and that
the paving program should be re-proposed.
Paving Proposal
The Board believes that paving of Oak Lane and the lower
part of Spring Point Road should again be placed before the
annual meeting for discussion and possible action. Again, here
are the key facts:
We have ~1.4 miles of chip-sealed roads. Chip-seal must
be re-applied every 5-8 years, and costs about $4/sq. yd –
this works out to about $1600/yr for each 1000 feet of
roadway.
We have ~1.4 miles of “major” un-paved roads. “Major”
includes Oak Lane and Spring Point Road from Hamaker’s
to the North end of the lower road. It does not include
Link Lane, Juniper Lane, Serendipity Lane, Headland Road,
Nutchatch, Fawn, Park Place, Fisher King, or other “named
driveways” . Every year we typically have the major unpaved
roads graded, graveled, and have dust-tack applied.
This annual maintenance work costs from $12,000 to
$18,000, which (curiously) also works out to about $1600/
yr per 1000 feet of road.
First-time chip-sealing of our major un-paved roads would
require some significant preparation including grading,
laying down substantial amounts of gravel (average 4”
deep) and machine-compacting. Island Excavators provided
a budgetary price quotation in July of 2012 for this
preparation that works out to about $8,000 per 1000 feet
of road. This quote would need to be updated if the
members directed the board to undertake a paving program.
Doolittle and Company, who did our chip-seal maintenance
in 2011, provided a budgetary price quotation (in
July 2012) of about $8/sq, yd, for first-time chip-sealing.
This works out to about $12,000 per 1000 feet of road.
The combined cost is therefore about $20,000 per 1000
feet of road, or about $150,000, plus some mobilization
costs. If we did the major roads as a single project, mobilization
costs would occur only once. If we did it over several
years, we would incur them each year.
In some places, it will be difficult to achieve a two-lane
road width. When traffic meets, it may be necessary to
pull off the paved roadway which could damage the road
and shorten the life of the paving job.
In summary, we don’t expect paving the un-paved roads to
have a significant impact on our long-term maintenance costs.
A vital impact would be a substantial reduction in the mess
associated with the road – mud and potholes in the winter and
dust in the summer. Here are questions to be addressed by
the annual meeting:
Shall we develop a program to pave the major unpaved
roads
Should such a program be undertaken in a single project,
or spread over several years
Should such a program be paid for by a general assessment,
or by increase in dues plus financing
Within the Long Term Plan, the Board and the Assisting
Committee have suggested that a paving program, if approved,
should be paid for with a special assessment on all
members of $750 for two successive years, after which the
paving program would be implemented. At the direction of
the membership, these special assessments could be in 2013
and 2014, with the paving occurring in 2015, or later. Since a
special assessment requires a referendum in which a minimum
of 60% of members vote, and two thirds of those voting approve,
it is likely that this referendum will be held using a mailin
voting process.

Treasurer’s Report
General Account
This fiscal year ended with Income and Expenses being
within a few dollars of the total budgeted amounts. The General
Account ended the year with a Checking balance surplus
of $80,871.92 and with a Tidelands Reserve CD balance of
$2,328.80. The Checking balance will be carried forward into
fiscal year 2013-2014 while the CD is a permanent requirement
of the Department of Natural Resources.
While the Treasurer’s Report chart shows one annual
dues payment un-paid, that amount was received shortly after
the start of the new fiscal year. Thanks to everyone for being
prompt with their payment.
The final payments on the four short-term loans, used for
existing chip seal renewal, were made this last year which
completes all unscheduled projects for the General Account.
At this time, the Board proposes to maintain the annual dues
at $600.00 which will be the eighth-year for this amount.
Should the Membership decide to undertake improvement
projects not included in the proposed budget: funding
from the current surplus, or an increase in dues, or a general
assessment, or loan financing will need to be considered.
As always, the Association’s books are available for your
scrutiny. Give me a call and we’ll arrange a time for you to
come over to look. (For even faster service, try offering me a
glass of great scotch.)
Water Account
The 2012-2013 year ended with a balance of $95,535.22
in the Checking account. Income and Expenses were within
tolerances throughout the year until a few weeks ago when it
became obvious that the Slow Sand Filter project was going to
cost more than previously thought. Costs were higher than
estimated because of higher concrete and labor expenses. In
addition, some of the materials required by the project’s engineers
were of a larger size than anticipated which cost more.
Since the project is well underway, the Board felt it important
to move forward to complete it in a timely manner.
To cover the near-term cash shortfall, it was decided the best
alternative was to duplicate the loan program used by the
General Account to fund the renewal of road chip seal. Four
loans ($10,000.00 each) were secured from Water Account
Members with the first payment (half the loan plus interest) to
be made in October 2014 and the balance to be paid in October
2015.
With this cash infusion, the proposed budget chart shows
a cushion in the Water Account of a little over $18,000.00 for
fiscal year 2013-2014. Because this is a cash flow challenge
and not an affordability issue, the Board proposes to maintain
the Annual Water Dues at $600.00. However, early payment
of your dues is greatly appreciated. The invoices will still be
mailed at the normal time but if you send your payment early,
I will see that you are correctly credited.
The benefits of the water system modification remain
unchanged and it is still anticipated there will be significant
operational cost savings once the project is complete.

GENERAL ACCOUNT—CATEGORY TITLE
1 July 2012
Beginning Balance
30 June 2013
End Balance
1 July 2013
Beginning Balance
Islanders Bank – General Account Checking 68,955.00 80,871.92 80,871.92
Tidelands Reserve CD Account 2,320.00 2,328.80 2,328.80
INCOME 2012-2013 Budget 2012-2013 Actual 2013-2014 Budget
Annual Dues – General Account 67,800.00 67,200.00 67,800.00
Fees – Construction Impact on Roads 2,000.00 3,300.00 2,000.00
Dues – Previous Year 0.00 0.00 600.00
Dues – Kayak Rack 575.00 650.00 650.00
Other Income 0.00 629.80 0.00
Interest – Checking Account 170.00 72.36 80.00
Interest – Tidelands Reserve CD Account 10.00 9.29 10.00
TOTAL INCOME 70,555.00 71,861.45 71,140.00
EXPENSES 2012-2013 Budget 2012-2013 Actual 2013-2014 Budget
Bank Charges 0.00 100.00 0.00
Dock and Tidelands Expenses 2,000.00 6,920.68 2,000.00
Insurance – General Account Share 2,800.00 2,712.00 2,800.00
Kayak Rack 0.00 0.00 0.00
Miscellaneous 1,800.00 399.16 1,800.00
Office Expenses 1,200.00 1,570.04 1,500.00
Professional Services 1,500.00 760.00 1,000.00
Roads – Chipping and Mowing 9,000.00 5,565.84 9,000.00
Roads – Capital Costs 0.00 0.00 0.00
Roads – Maintenance 20,000.00 20,279.42 20,000.00
Roads – Loan - Principal and Interest 21,000.00 21,000.00 0.00
Property Tax – General Account Share 300.00 135.15 200.00
TOTAL EXPENSES 59,600.00 59,942.29 38,300.00
WATER SYSTEM ACCOUNT—CATEGORY TITLE
1 July 2012
Beginning Balance
30 June 2013
End Balance
1 July 2013
Beginning Balance
Islanders Bank – Water Account Checking 186,431.00 95,535.22 95,535.22
INCOME 2012-2013 Budget 2012-2013 Actual 2013-2014 Budget
Prepaid Meter Fees 0.00 -143.81 0.00
Water System Loan – Slow Sand Filter Project 0.00 0.00 40,000.00
Annual Dues – Water Account 52,200.00 52,200.00 52,200.00
Water User Meter Fees 21,000.00 20,086.72 21,000.00
Other Income 0.00 100.78 0.00
Interest – Checking Account 230.00 180.90 200.00
TOTAL INCOME 73,430.00 72,424.59 113,400.00
EXPENSES 2012-2013 Budget 2012-2013 Actual 2013-2014 Budget
Miscellaneous 500.00 0.00 500.00
Office Expenses 250.00 65.86 250.00
Operating Cost – Pond Electricity 2,500.00 2,158.12 2,500.00
Operating Cost – Pond Operations and Maintenance 10,000.00 12,599.38 15,000.00
Operating Cost – Pond Telephone 0.00 425.77 550.00
Operating Cost – RO Plant Electricity 1,000.00 469.01 1,000.00
Operating Cost – RO Plant Operations and Maintenance 5,000.00 398.73 5,000.00
Operating Cost – Employee Gross Salary 20,790.00 20,790.00 20,800.00
Operating Cost – SPHA Payroll Tax Obligation 5,000.00 3124.65 4,000.00
Insurance – Water Account Share 2,800.00 2,712.00 2,800.00
Property Tax – Water Account Share 300.00 135.15 200.00
Capital Cost – Slow Sand Filter Project 150,000.00 120,832.44 138,000.00
TOTAL EXPENSES 198,140.00 163,711.11 190,600.00

Board of Directors
President, David Dilling, 376-4314, President@Springpt.org
Vice President, Jean S. Soderquist, 376-4190, jeanandmarv@centurytel.net
Secretary, Bev Polis, 376-8808, polisassociates@yahoo.com
Treasurer, Rich Goodhart, 376-1049, richandalayne@gmail.com
_________________________________________________________
Director, Andy Saxe, 376-5904, saxe.andy@gmail.com
Director, Kevin Golding, 376-2315, krgolding@msn.com
Director, Millie Vetterlein, 376-2189, mvetr@centurytel.net
_________________________________________________________
John Ryberg, water, 376-4871, jonwan@rockisland.com
Jack Conant, roads, 376-2451, lockpickers@rockisland.com
Don and Sandi McVay, water meter readers, dmcvay@peak.org
Calendar of Events 2012-2013
2012 Annual Meeting 8/18/2012; 10 a.m. Deer Harbor Community Club
September Board Meeting 9/18/2012; 7p.m. Polis Home
October Board Meeting 10/16/2012; 7p.m. Goodhart Home
November Board Meeting 11/15/2012; 7p.m. Dilling Home
February Board Meeting 2/5/2013; 7 p.m. Soderquist Home
March Board Meeting 3/11/2013; 3 p.m. Dilling Home
April Board Meeting 4/8/2013; 3 p.m. Water Works
Chipper Day 4/15/2013 Spring Point
Fire Drill 5/15/2013 Spring Point
May Board Meeting 5/23/2013; 3 p.m. Goodhart Home
June Board Meeting 6/12/2013; 3 p.m. Dilling Home
July Board Meeting 7/23/2013 7:30 p.m. Polis Home
Annual Picnic 7/27/2013 Hamaker’s Grove
2013 Annual Meeting 8/17/2013 Deer Harbor Community Club
Future Board Meetings 4 th Tuesday of the month TBA
Planned Events for 2014
2014 Annual Picnic 7/26/2014
2014 Annual Meeting 8/16/2014