January 2014 Newsletter

Hello LRAA Members
Happy New Year from your LRAA Board of Trustees!

Walt Mauldin – President
Kyle Larson – Vice President
Kevin Jahne – Secretary
Robbie Liechty – Treasurer
Kathy Trina – Communications & Solid Waste
Loren Seely – Airstrip Committee Chair
Jerry Daniels – Access (Roads)
Bob Christianson – Water System Chair
Kevin Latorra – Water Policy Chair

Since May when the board last addressed the members, a lot of work has been accomplished. The board has held monthly meetings, usually by telephone conference, with great attendance. This is remarkable in a volunteer group. This board has been particularly cooperative and supportiv

The board reviews and adjusts our work priorities every month. To see this list from each month and any discussions that the board had around them, access the board meeting minutes posted on the web.

To communicate with the board please visit the website and use the form found on the Contact Us page. If you send us an electronic message all of the trustees will automatically receive it. We also welcome messages through postal mail at PO Box 1272, Winthrop, WA 98862

Remember: You must clear a parking area so that your vehicles are completely out of the LRAA plowed roads. No parking is allowed on LRAA roadways during the winter. This includes renters.

Please respond to the enclosed survey regarding water meters. It may also be completed online. Complete LRAA 2014 Water Survey Online

Accounts with a balance of greater than $1,000 or any debt older than 3-years will have a lien applied to their property promptly after March 31, 2014, per the bylaws. All costs including attorney fees will be paid by the delinquent member per Washington State Law.

Here are some brief notes about accomplishments in the last half of 2013

• In 2013 the association acted to foreclose on the first of several properties that were delinquent on their dues and fees. The association applied with the courts who agreed these were valid debts owed to the association and granted us permission to foreclose and auction the property. A sheriff’s sale was held and the property was sold. The total debt to the association, about $6,000, was paid to us. All attorney and other collection costs were paid from the sale of the property per Washington law. The association completely recouped what was owed to us. A second foreclosure is currently under way.

• The water system committee continues to make progress at working through our water system strategic plan. This is a continuation of the plan you approved in May of 2011 and updated in May of 2012 and 2013. This long term plan is aimed at upgrading weaknesses in our water system. Some of this work has been slow because of permitting challenges. New pump control equipment was installed on the lower system. We expect by the May meeting this year to have a 2nd well and casing installed for the upper system. Funding for this work is in place.

• Since our last member meeting we have not had any significant emergencies with our water system. The work that has been done is programmed and budgeted work. It seems like (knock on wood) that our strategic system improvement work is starting to catch up and pay off.

• Administration continues to make improvements in the way the association is keeping records.

• We are in our 2nd year of a three year contract with Palm Construction for snow removal services. The association is very happy with this agreement and we hear positive reports from members about the quality of the services.

• We still need to complete the street signage project. A call for volunteers to assist with this in the spring will be going out.

• The General Fund (GF) reserve fund remains fully funded at $25,000 at the end of 2013, and the Water Fund (WF) reserve fund remains fully funded at $50,000.

Membership dues and annual water fees increase in 2014

The annual water fee for 2014 is $308/water right and the annual membership fee is $441.76/member as approved by the membership at Memorial Day. These fees have increased by about $122 for a membership and one water fee combined. We paid the same dues and fees for the past three years. ($365-General & $265-Water) This was done by using surplus funds to absorb the normal cost increases. Most of those surplus funds came from collections of delinquent accounts. In May the membership was asked if we should use surplus monies in 2014 to “hold down” the fees. The membership said no, with everything in front of us let’s each pay our share of the expenses in 2014 and retain any surplus monies we may have. A small portion of the 2014 increase is due to increased costs. Most if it is due to our choice of not using surplus monies to continue to “buy down” the rates.

At the May 2014 member meeting the board will present a draft 2015 budget to be approved by the members. This will include proposed budgeting for the first half of the water meter project.

Water Fund

The Water Fund (WF) seems to be working at an annual fee of $308/ water right. Assuming we don’t have major problems this winter with freeze-ups and other emergency repairs, I would guess that we will propose about the same annual water fee with the water meter project in addition to it.

The water meter project will be upon us in the year 2015. It is expected that each water right will be charged an amount equal to a share of upgrades made to the system and each service that gets a water meter will be charged a water meter share. The first ½ of these charges will be applied to each account in January of 2015. These charges will be applied above the regular annual water fee. This will be discussed in further detail below and in even more detail in a late January mailer.

General Fund

In the General Fund (GF) we continue to see increases in insurance and small increases in other areas. We also need to look at the equipment/methods that we are using to mow the runway and see if we are doing business in the best way possible. This could bring some new costs. Another factor we continue to see is a slow reduction in the number of members we have which results in each member paying a slightly larger share. This happens when a member buys their neighbors property and one member leaves the association. This is an old trend with us losing a member or two each year. All of these things add up to a probability that the board is likely to recommend a slight increase in the annual membership fee for the 2015 budget year.

Four board terms expiring in May

Walt Mauldin will have served as the president of our association for 4-years. From May of 2014 forward for 2 or 3 years our association will be engaging in the most expensive and risk filled work it ever has, the water meter project. In addition to managing this we need to seek a new president that can lead us forward with the improvements that we have worked so hard on making in the last few years. If there has ever been a time we need a strong leader, it is now. Please be thinking about who might lead us beginning in May.

Kevin Latorra has served as the Water System Permitting Chairman for four years. He has overseen the management of our system permitting and the oversight of our listed water rights. He has overseen a change in the way the association records and tracks water rights. You will note a reference to parcels with water rights on your invoice; this is the tip of the iceberg of his work. His three + one year term will end in May.

Bob Christianson has served your board for three years as the water system manager. Bob has been instrumental in updating the water strategic plan and getting us directed toward meeting the water meter requirement. Bob’s term ends in May.

Robbie Liechty will complete her three year term serving as Treasurer. Robbie has played a key role in the way the association has managed delinquent accounts which has caused the list of those delinquent to change from huge to quite manageable. Over the next term the Treasurer will be a critical job in the association as we navigate the water meter project. Please consider serving your association. We are especially seeking persons with some interest or experience with finances.

Kathy Trina joined us part way through the tenure of another trustee who left midterm. Kathy just needs to be officially elected to this position by the membership to complete one more year of the term. She is willing to do this.

Please consider if you might be willing to serve your association or who you might support to serve as a trustee. We will be looking for nominations for four board positions for election at the May member meeting.

Financial report on the Web

Your association is doing well financially. Draft 2013 financial reports will be available on the web page shortly.

The General Fund appears to have under spent the 2013 budget by about $3,650 which I call great budgeting. The Water Fund was under spent by about $13,000 which was caused by our not getting the new well at the fire hall drilled as we had planned because of permitting delays. The budgeting for this work will be carried over to 2014 and will have minimal fiscal impact since it has already been funded. There were no large unforeseen emergencies in 2013.

The performance of collections of normal revenues from members has improved significantly. The association has been more aggressive about enforcing our financial policy. We have tested our ability to collect debts in court, and have been unilaterally supported by the courts. It seems that our new processes have encouraged our members to do a better job of paying their dues and fees on time.

Our revenue in the both the WF and GF has been slightly above predictions because of some one time payments received in 2013 as a result of collections work. This short term windfall revenue will serve to provide a little extra surplus money us as we move forward.

New Water System Manager

The association has for quite a few years retained a water manager to oversee the day to day operations of our system and to be available to respond to emergencies. Our previous manager left us last summer. We were lucky enough to recruit Zach Huff to replace him. We introduced Zach at the member meeting in May. Zach seems to be working out well. Our vision is to expand Zach’s role to become the water manager who carries the certifications and manages the permitting of our system. Zach will be very busy with the water meter project.

Land swap on Susan Road

As I sit writing this, the final documents for adjustments to the parcels on Susan Road are being processed. By the time we meet in May this project should be a done deal. The goal of the association/public owning the property under Susan road should be met.

Update on collection actions

In May of 2011 the members directed the board to make collection of delinquent accounts our first priority. We have made great strides at collections. We completed a foreclosure in 2013 and have filed for a second, and probably final, foreclosure which will close in 2014.

Now the fiscal policies will begin to take routine effect. Per the bylaws we will move promptly at the first of April to Lien properties of accounts with a balance over $1,000 or with any debt over 3-years old. All attorney and processing fees for application and removal of liens will be the responsibility of the member per Washington State law. It costs about $275 to apply and remove a lien. In addition the board will recommend a modification to the bylaws directing the treasurer to immediately lien any property with any delinquent balance if the board learns that the property is for sale. These practices will serve to limit debts and hopefully avoid the business of foreclosure.

Water Meters

As we have reported over the last two years we are required to install water meters to each service connection of our water system by January 31, 2017. This is a statute implemented by Washington State and the Department of Ecology. For background see the newsletter distributed with last year’s bill, available on the web.

In 2013 the membership approved creation of a committee to look at how to implement this requirement and make recommendations to the Board and membership. The committee was divided into three sub committees;

1. Implementation Policies and Finances
2. Implementation Engineering and Execution
3. Post-Implementation/Ongoing Policies

These subcommittees have been working to develop a proposal for the membership to approve at the May meeting. A detailed summary of their thinking will be mailed to you in early February. This will be a document that provides members with a view of how the committee and board will recommend approaching this huge and expensive project. When that document comes out, a discussion board will be provided on our web site for members to ask questions, make suggestions and comment. The next task of the committee will be to draft a set of policies to be distributed with the May meeting agenda for approval by the membership.

Your chance to participate in this activity is now. The proposal and policies will be discussed at the May meeting and will be voted on by the members. If you want to have your voice heard you need to study and understand the problem, participate in the pre-meeting discussion with constructive ideas and then be at the meeting in May to discuss and vote on a policy which will direct the board on how to proceed.

Here are some insights into what the committee currently is thinking

We will need to install about 170 water meters. The committee recommends that if while installing meters we find a problem in the LRAA water system (not private pipe) between the meter and the main we correct it since we already have the hole dug. We know that there are unauthorized connections to our system to parcels that do not have water rights. These will need to be disconnected. We assume that some owner’s who have water rights and are connected to the LRAA system, are going to choose to be disconnected instead of paying to install a water meter. The cost of disconnecting these services will be considered part of the general costs of this project and will not be billed to individual members. We have also included in our estimated project cost, software for managing data, project oversight, professional services etc.

The committee will recommend carrying out this project in a cooperative way with each member holding a water right paying an equal share of the system upgrade costs and each member requesting a water meter paying an equal share of the water meter installation costs.

Our plan is to build a set of policies and an estimated budget for the first half of this work in May of 2014 and ask the members to approve the plan and collection of this first half in January of 2015. Then in the fall of 2014 work to get bids from contractors and have a contract in place and go to work on the first half of the project in the spring of 2015. Having the first half of the work done by the fall of 2015 should give us better cost data to base a budget on for the second half of the work. We bill the second half of the work in January of 2016. Then either select a new contractor or continue with the previous one and complete the work in the summer of 2016.Our best estimate at this time is that this project will cost us about $720,000. Divided by 170 meters to be installed is about $4235/installed water meter, with members paying this amount with two payments in January of 2015 & 2016 and if necessary a third payment in January of 2017. The cost could be more or less depending on the conditions find during the project. A more detailed budget will be provided with the mailer in February. Some of these costs are the direct cost of installing a meter and will be divided by and billed to those that have a meter installed. Some of these costs, like re-installing a line to the proper depth, are considered system upgrades and will be billed to each member holding a water right, regardless of whether it is physically connected.

Water meters will be buried in underground vaults on LRAA property near the private property line of the parcel they serve. They will each be equipped with a lockable shutoff valve for association use. Each meter will be equipped with a transponder so a wireless device can be driven through the community and collect data from each meter without physically accessing each one.

For those that need financial help, the committee is developing a process allowing members to apply for assistance. Those that are approved would be allowed to pay their meter project costs over a longer period, and would be charged interest. Members that are unwilling to pay their share will be disconnected from the water system. Members who do not want to pay water meter project costs can opt to be disconnected from the water system, but would be permitted to retain their water right on said parcel with no physical connection. They will still have to pay for system upgrades in their annual water fee. Future installation of a water service and the required meter will be paid solely by them and they will continue to be required to pay the annual water fee in order to retain their right.

We hope to include a mapping element in this project to improve our system maps.

The committee will recommend that the data collected from the meters in the future be used primarily to help members learn to conserve water. Our water permits allow fairly generous use of water in when the river is up, generally in the fall, winter and spring, but allow very limited use in the summer months when the river is low. The thinking is to have an annual water fee just like we do now that will include a base allotment of water per month. Usage over that amount will be charged at an additional fee per unit of water. At some point the additional water use by a member becomes abuse and the additional water will be charged at a much higher rate per unit of water used. The overall goal of thie statute and it’s meter requirement is to conserve our water resource and to encourage water systems to stay within the usage limits granted to them by their water permits.

As you can see this is a complex and expensive project that has lots of serious ramifications. Water rights and how much water we can each use is going to become a bigger and bigger deal over time. In the future how much water we have available may become a prime driver of how much our properties are worth.

The board and your association asks you to please participate in this decision. Now is the time for you to be involved. Not everyone is going to be happy with this requirement and we wish we didn’t have to comply but we do. We ask you to study this, weigh in, and participate in the May meeting when final decisions will be made.

May meeting reminder and info on how to participate

Mark your calendars for Sunday May 25, 2014 @ 9:00AM. This is the annual membership meeting held at the fire hall. You, the members, are the boss! We, the board, need to hear from you. How are we doing? How could we do better? What do you want us to work on? Please plan to attend, and stay for the picnic and social after the meeting.

Our by-laws provide for the following process and deadlines for getting your voice heard:
If a member or access owner wants to bring an issue to the Annual Meeting for a vote by the members/access owners, mail it to the board in writing by April 30, 2014 (PO Box 1272). Submit any proxies in writing to the board by Tuesday, May 20, 2014. A member wishing to speak at the meeting needs to notify the board no later than the morning of the Annual Meeting, May 25th, 2014. These presentations will be limited to 5 minutes. No matters may be brought to a vote unless they have been submitted in writing by April 30th, 2014.

The Annual Member meeting is a great opportunity for the board to update LRAA members on the state of the association and progress on goals. Even more importantly it’s an opportunity for the board to hear from the membership. There are three ways that you can have your voice heard at the meeting: 1) bring an issue to the Annual Meeting for a vote; 2) vote in person or by proxy; 3) request to speak at the Annual Meeting.

Thank you for your time in reading our newsletter! We hope to see you in May!

We would love to hear from you. Please visit our Contact Us page to make a comment.

Or write to us at:
PO Box 1272
Winthrop, WA 98862

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