West Beach Road Association

Present: James & Barbara Alley, Rudy Deck, Bill & Belinda Hawkins, Robert Elphick, Anita Dragoo, Bill & Gabrielle Thurman, Lorraine & Bill Van Zytveld, Dave Steckman

Proxy: James McElroy (Thurman), James Brix (Dragoo), Jenny & Mike Nunn (Elphick), Kenneth Weichel (Dragoo), Shannon Buys (Steckman), Cindy & Bob Bush (Dragoo), Loretta, Bill & Miles Hamburg (Van Zytveld)

Absent w/o Proxy: Dr. & Mrs. Robert Lycksell, Judy Graham, Earl Darst, Tom & Katherine Stewart, Peter and Jeanne-Ming Hayes, Jim & Wendy Patton, Leah & Trent Oman

The Annual Meeting of the West Beach Road Association was called to order by the President, Bill Hawkins, at Noon in the Conference Room B at Whidbey General Hospital. It was noted eight members of the Association were present and seven proxies were presented to the Secretary for a total of 15 members and/or proxies. A quorum was noted for the meeting.

The President asked if members had read the minutes of the April 10, 2011 Annual Meeting and the April 23, 2011 Special Meeting. Bill Thurman moved, second by Rudy Deck, to delete the reading of the minutes. Motion passed unanimously.

Bill Van Zytveld moved, second by Bill Thurman, to approve the minutes of both meetings as posted on the web site and distributed to the members. Motion passed unanimously.

President’s Report:

1. The President corrected an earlier assumption that the Darst Bulb Farm was incorporated. It is not incorporated in Washington, but was incorporated in Nevada. However, the incorporation was allowed to lapse or was revoked.
2. The sale of the Darst parcel (R03224-255-2950) is no longer an option as Darst former business partner, Errol Hanson, is in foreclosure on the property to collect on a promissory note. According to a Court filing of a "Notice of Trustee’s Sale, Island County, Washington," filed November 17, 2011, the aforementioned parcel is in foreclosure as Earl Darst has not paid the principal due December 1, 2009 ($221,533.56), accrued default interest (24%) through July 31, 2011 ($121,631.03), late fees ($250) for payments due May 1, 2009-November 1,2009 ($1,750.00), and a late fee (10%) for balloon payment due December 12, 2009 ($22,153.36). The total of the foreclosure is $367,067.95. In addition to the aforementioned amounts, there are Trustee’s estimated fees and costs amounting to $2,700.00. There is to be a foreclosure sale on February 24th, but it is doubtful that anyone will be interested in paying the aforementioned cost to acquire the property nor is WBRA’s lien expected to be paid. The Association should consider placing a lien on other properties owned by Earl Darst.
3. The President noted WBRA is classified as a 501(c)(12) with the Internal Revenue Service. The renewal of this status was not sent to the appropriate WBRA individuals causing the status to lapse. Rudy Deck submitted the needed paper work to re-instate this status with all governmental agencies (Federal, State, and County). A fee for the re-instatement was $100, an expense the Association had not budgeted. The President has assigned the duty of keeping the Association 501(c)(12) status up to date to the Vice President, Rudy Deck. In order to ensure the Association remains abreast of all future needs such as the 501(c)(12) filing, the President requested the Secretary be given a copy of all materials to hold as a permanent record for the Association.
4. Recent legislation passed by the State of Washington directly affects the operation of Condos and Homeowners Associations such as WBRA. Under Washington State Law, 2011, Chapter 189, Condominium and Homeowners’ Associations – Reserve Accounts and Studies, WBRA may be required to prepare and fund reserve studies to determine "whether currently projected reserve account balances will be sufficient at the end of each year to meet the association’s obligation for major maintenance, repair, or replacement of reserve components during the next thirty years." A copy of the new legislation is attached. (Addendum A) The reserve studies are to be done by outside appraisers who are trained and independent of the Association. The President noted WBRA Board of Directors has already begun discussing these needs for long term maintenance and replacement of equipment. The President will distribute copies of the new legislation to the Board members for their review before the next WBRA Board meeting. He estimates the cost of the independent study to be approximately $500.
   
   Robert Elphick moved, second by Bill Thurman, to move forward with establishing these capitalization funds as required by Washington State Law. Motion passed unanimously.
5. As a result of the aforementioned problems as well as other activities, the President is suggesting the members consider Directors and Officers Liability Insurance. It was assumed this liability coverage existed; however, it was found that this was not the case. Bids are being sought from two local insurance agencies. One bid came back at $600 with a $10,000 deductible. The other bid was not received before the WBRA Annual Meeting. A major influence on the cost of D & O Insurance is the fact the Association has been involved in two lawsuits.

Treasurer’s Report:

Rudy Deck presented the WBRA 2012 Budget on behalf of the Treasurer, Bill Van Zytveld. He noted the WBRA finances are in good shape for 2012. As a result there is no need to raise the water fees or dues for the fiscal year of 2012. Although it is projected the Association will end 2011 with a deficit of $192 in the Water System, Fixed and Variable Account, the 2012 Proposed Budget suggest the water fees will generate $8,500 ending 2012 with a positive balance of $561.00.

The Water Capitalization Fund is expected to end 2011 with a balance of $9,561.00 with only one member not paying the water assessment fees. At the end of the 2012 the Association should collect $2,304.00, bringing the Water Capitalization Fund to $11,825.00.

As a result of new state legislation for the reserve study, the tank, filters, pumps, pipes and other equipment will be reviewed at which time a "study-fee" of an estimated $500 is anticipated that is not budgeted in the 2012 WBRA Budget Proposal.

Under the Road account, it was noted all members paid the assessment to replenish the Road Fund for the legal fees ($5,500). Currently, the Road Fund has a balance of $40,274.00. The 2012 assessment for paving ($250) will bring the total Road Fund (paving only) to $44,824.00. With the transfer of $1,000 from the General Fund to the Road Maintenance Account graveling and grading of the other roads within the Association were approved by the WBRA Board of Directors at their last meeting. Work is expected to begin as soon as Valdez Construction completes work in Concrete, WA. The total for this project is $2,000. It was noted a timely and continuing maintenance program needs to be implemented to protect the gravel road surfaces within the WBRA. This again will be part of the reserve study and projection. The President noted it is important to consider the long term feasibility of resurfacing the present road system without looking at the need to address such problems as the road bed and drainage problems that presently exit. The current road system was not developed according to the regulations established by local governments. In the long term, addressing the broader issue of a "green road certification" could be in the best interest of the Association.

Water Manager’s Report:

According to Jim Alley, "the water system is operating normally with no undue problems." He noted the State Department of Health conducted a major (every 5 years) water system inspection and declared the physical facility, control systems, and record keeping to be in excellent condition. Water expenses nearly equal revenues. Further, he suggests, we need to continue to build the water capitalization fund to meet long term capital needs. The Board recommends long term expenses and capitalization costs of the WBRA water system in 2012, to be reported to the membership next year (2013) regarding long term water capitalization plan. Of major concern is the age of the 5 pumps, age of the pipes that delivery water to the home owners, as well as disaster plans for the Association.

Some members expressed concern that the Association should get bids from other Water Management companies on the island to ensure King Water remains competitive with its charges to the Association and its members. It was agreed to move forward with seeking other bids from other water management companies. It was also thought that it would be helpful to have a report from the Whidbey Island Water Association. Island Water Management Systems in Oak Harbor was suggested as a bidder.

Road Manager’s Report:

Board member Dave Steckman noted he had researched other options for gravel and grading the roads in the WBRA. However, the smaller companies were no longer in business. Valdez remains the operational bid with work to begin soon on the gravel areas according to the Road Manager, Jim McElroy. McElroy is moving forward with the graveling project at the order of the Board of Directors. The Board also recommends the Association develop a long term maintenance program for our gravel roads to maximize the value the Association receives from repairs.

Another issue was the road signage (No through Road, 20 MPH Limit, and Children Playing) that was removed during the beautification of the entrance to the Association. Jim Alley noted he had some of these signs in his garage. Members agreed the signs need to be erected in an effort to control traffic in the Association. Signage was approved by the membership at an earlier meeting of the Association.

Architectural Control Committee Report:

It was noted Shannon Buys has been elected to the AC Committee replacing Wendy Patton. Over the last two years no new building projects have been submitted to the Committee.

Budget Additions And Approval:

Robert Elphick moved, second by Rudy Deck, to approve the 2012 Budget with the addition of $500 expense for the reserve study prescribed by recent legislation and Directors and Officers Liability Insurance (approximately $600). The General Checking budget figure changes from $1,373 to $873 for 2012. Motion passed unanimously.

New Business:

The President noted two candidates were on the official ballot for the Board of Director position vacated by Margaret Elphick. These candidates are Anita Dragoo and Jim Patton. Shannon Buys is running unopposed for the position on the Architectural Control Committee replacing Wendy Patton. The secretary will tally the ballots and send an email to the membership with the results of the election.

It was noted the fees and assessments for 2012 amount to $450 per member ($100 WBRA Dues, Road Assessment $250, and $25/quarter water capitalization fund) with the exception of Buys who are exempt from the road assessment all members are required to pay these amounts. There being no further business Bill Van Zytveld moved, second by Rudy Deck, to adjourn the meeting. Motion passed unanimously. Meeting adjourned at 1:36 p.m.

Respectfully submitted,

Gabrielle A. Thurman, Secretary