Deer Creek Landowners, Inc. Board meeting
Home of Joy and Tony Mundy/Navarrete
October 12, 2010
Meeting called to order at 7:10. Present Joy, Tys, Joseph, Tom, Manuela. Craig and Bruce absent. Motion by Tys to approve minutes of last two board meetings, 2nd Joy, approved.
At the upcoming November membership meeting there will be a Notary present to notarize the signatures of 4 Board members who will be signing approximately 40 liens; subsequent to the meeting the Secretary will record the liens. Tys will get all Board minutes up on website.
We have 14K in the bank, and Tom has a few more invoices to submit. 52 people have paid. Craytor sent another payment in. $350 we gained from the Gordy Memo – one of the landowners however paid the $35.00 rather than paying their owed amount. Manuela moved to accept, Joy 2nd, accepted.
· We still need to “repair” the culvert by the green gate on Ramble. Shouldn’t be hard -- just open up the uphill end. Possibly this won’t be sufficient and we may need to replace this culvert next year.
· There’s a culvert below the green gate that is made of asbestos and is completely plugged. It needs to be replaced. That’s the project that’s currently in the budget.
· We need to put a downspout on the yellow gate culvert within the next few months (mid-Dec)
· We also, within the next few weeks, need to patch the asphalt
· Black gate to green gate, 2 transfers of drain rock and 2 of finish rock
· The S curve in middle Ramble needs rock and roll (if there’s $)
· Other maintenance/repairs that would be good to do, but we don’t have the money
· Jose’s section needs more work -- the culverts should be cleaned.
· The CalFire project: there are 2 remaining projects to compensate for the damage on the road. One was to open up Lost Valley to fire access. The other was to clean up Skyview. Unfortunately, the only way they can do these projects is on Saturdays, using overtime work.
· The estimate for paving from 3rd bridge to Ramble was $21k
· Tys moved to accept Road Manager’s report, Joy 2nd, accepted.
Most of the discussion in the meeting was devoted to the subject of modifying the JMA to change the billing algorithm.
Joy argued that the current billing algorithm must be changed, because the way it’s written is incorrect. Tys agreed, and together they convinced the group. The current algorithm says that residents pay 60% of the road maintenance costs. This is fine if the balance between resident and nonresident remains roughly constant. But what if everyone but Joy becomes a resident? Clearly that’s wrong. Joy is pushing to change the language asap, before this becomes an issue.
Joy presented a proposal to change the billing algorithm in the following ways:
· Separate the front of the road (up to the yellow gate) into its own area. Its projects would be budgeted separately (as is already the case), and billed separately. The “845-ers” would be billed based only on the projects that take place on the front of the road.
· Distinguish between general maintenance (rock, potholes, culverts, etc.) and major projects (substantial grading, landslide stabilization and repair, paving, bridges).
o General maintenance would be pooled as it has always been (except with a modified algorithm).
o Major projects would be charged based on whether each landowner has a right of way at the point of the project.
Much discussion ensued. The Board quickly agreed that pooling is a good approach for general maintenance. By “pooling” we mean lumping many project costs together into a pool, and allocating based on miles driven. Pooling is a good approach for general maintenance because:
· It fosters a sense of community.
· General maintenance at the top of the road affects maintenance further down. In many cases, fixing drainage further up the road can greatly reduce erosion etc. lower down the road. If all projects, including general maintenance, were billed solely on whether each resident drives past that point, the effect would be to have fewer projects at the ends of each road. This is almost certainly not an optimal solution.
· Similarly, general maintenance on the ends of the road improves the quality of the Deer Creek.
· Pooling is a simpler algorithm for the treasurer.
· Pooling provides a mechanism for us to more nimbly respond to unplanned expenditures. If there were no pooling… if 100% of the budget were charged based on whether you drive past point A… it would be problematic to redirect funds to address a maintenance problem that arises mid-year.
The Board spent several hours discussing this issue. Joy and Tys were initially in favor, and for a while there had everyone else more or less convinced too. But in the end, the entire BoD agreed that this was not a practical solution. Discussion centered around:
· What defines a large project? Is it a budgeted amount (in other words, all projects over $2500), or the kind of activity (paving, landslide stabilization, grading, culverts)?
· Is it feasible to expect the Treasurer to be able to create this kind of customized bill? The BoD agreed so, especially if there are only a handful of major projects each year.
· If we direct-bill and some residents don’t pay (as is always the case), will we ever go ahead with any project?
· What if we direct-bill and then for some reason don’t do the project that year? Somehow we’d need to adjust each bill retroactively.
· Residents’ annual bills will vary dramatically from year to year. We are afraid that, in years when each individual would benefit from a major project, they will not pay (some won’t be able to pay). Major projects would never be fully funded, and would never get done.
Joy continued to feel that residents at the ends of the road pay too little. She proposed that we pool all costs, but divide those costs into 3 pools: Front of road (sections 1 & 2), Middle of road (sections 3 & 6, possibly 11), Steep roads (all others combined into a single “steep road” pool). Landowners would be charged based on how many Front-of-road miles, Middle miles, and Steep miles you pass through to reach your property.
· The algorithm / spreadsheet to create these bills would be pretty complicated.
· This additional complexity would affect the bills of only a handful of residents.
· Too tired to argue, Joy withdrew the proposal.
· Create two pools: front of road to the yellow gate, and the rest of the road.
o Budget and bill the front pool separately. The “845s” are charged based solely on the projects that take place on the front of the road. DCLI members also pay that same rates per mile for that section of the road.
o Budget and bill the rest of the road as previously. “845s” do not benefit from these projects, and do not pay into them in any way. All DCLI members pay the same rates per mile driven over DCLI roads (which is a different rate per mile than the 1.5 miles at the front of the road).
· Continue billing much as before, with the same definitions of resident / non-resident. With a goal of keeping bills almost unchanged, while solving the original problem (see several pages back, at the beginning of the discussion of New Business), we agreed to modify the billing algorithm to charge residents at a rate per mile driven of 2x the rate per mile driven by non-residents.
o Tom pointed out that we really need to keep the distinction between resident and non-resident rates in the algorithm, as that has been a factor in many lawsuits.
o Joy pointed out that just because the current rate is 2x, doesn’t mean that’s necessarily the correct rate. The general feeling was that 2x was probably the upper limit -- in other words, maybe the resident rate should be 1.5 times the nonresident rate, or 1.75, but more than 2x doesn’t feel right.
o As the hour was quite late by this time, the BoD agreed to propose 2x, but highlight it as a discussion item for the general meeting.