Annual General Meeting Minutes September 28, 2024

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ANNUAL GENERAL MEETING

Subject to approval and correction at the Annual General Meeting on August 23, 2025       

Call to Order:  by President Jim Coats at 10:02 am at the Scenic Estates Clubhouse

Board Members present: Jim Coats, Jeff Smith, Doug Cash, Leslie Dempsey, David Canterman (via Zoom)

Board Members absent:  None

Staff present:  Allison Cash, Justin Swaen, Nick Kluge (via Zoom)

Voting Status:  21 members checked-in, 48 absentee ballots received. Quorum.

Welcome and Introduction: Jim Coats welcomed LISECC members and introduced the board members, staff, and the Whatcom County Sheriff’s deputies who provided security for the AGM.

Jim reviewed the AGM agenda and outlined the procedure for members (both in person and on Zoom) to ask questions or share comments during the meeting.

Sandra Clavero made a motion to approve the September 23, 2023 Annual General Meeting minutes. Jacqueline Sehn seconded. The motion passed.

Water Treatment Plant Replacement Project Forum:

  • Jim began by talking about the Water Rights Adjudication in the Nooksack Basin. Beginning in late 2024 or early 2025, every well on Lummi Island will be required to demonstrate ownership of water rights. Lummi Island Scenic Estates is fortunate to have a consistent supply of water and holds water rights certificates dating back to 1959.

  • The board reviewed the history of what led to the necessity of building a new water treatment plant. Brian Smith, of Wilson Engineering, was on hand to help answer member questions about the project.
    The board emphasized that our current treatment plant, while still providing us with excellent water, has exceeded its functioning life expectancy. As a result, although we are currently meeting the turbidity standards set by the Department of Health, it has become increasingly difficult for our water operators to do so.  (It is important to remember that turbidity itself has no health effects. However, turbidity can interfere with disinfection and provide a medium for microbial growth.)

    • History of the Need for New Water Treatment Plant
      In 2020, LISECC entered into a Formal Compliance Agreement with the Department of Health in which LISECC agreed to “address surface water treatment improvements necessary to return to compliance with the Surface Water Treatment Rule (SWTR)”. LISECC staff, engineers and the Department of Health spent a great deal of time and resources investigating a variety of solutions to bring the finished water into compliance using the technology in the current treatment plant. Ultimately, however, it was determined that the only sustainable, long-term solution was to build a new water treatment plant.

    • Design of New Water Treatment Plan
      We are nearing completion of the pre-construction phase of the new water treatment plant. The new water treatment plant will be located on Dogwood Terrace, and it will utilize membrane filtration as the treatment technology. Membrane filtration is a barrier-based technology, which is highly effective in meeting turbidity standards.

      The flow rate of the new water treatment plant will increase from 67 gallons per minute to 100 gallons per minute. As a result of the increased flow rate, the system can support a greater number of water connections which will accommodate any future buildout of the LISECC community.

    • Funding of New Water Treatment Plant
      The three options for funding the treatment plant are:

      1.    Do nothing and fail to meet the terms of the Formal Compliance Agreement. Consequently, we will be fined up to $10,000 per violation per day.

      2.    Vote for a one-time assessment of $8,990 per lot. Dues relief for bound lots does not apply to special assessments, so this assessment would be paid for by all owners on each of the 445 lots in LISE.

      3.    Vote to authorize the board to apply for a 40-year, low interest USDA-Rural Development loan. If authorized, the loan fees would be paid by the owners of the 398 dues paying lots in LISECC. The board believes this loan, probably at the lowest rate allowable, is the best option for funding the new treatment plant.

      The board is currently using an estimate of $4,000,000 as a placeholder for calculating the cost of the loan to the membership. (It is expected that the actual cost of the new treatment plant will be lower, however, we must build contingency funds into the loan to cover unforeseen issues that might arise during the construction process.) Based on current rates, it is estimated that members will pay $33 per month per dues paying lot for the life of the loan.

  • Following the board’s presentation, members were given the opportunity to ask questions or make comments about the new water treatment plant and the funding process.

Committee Reports:

Administration Report:

  • David reported that LISECC has two significantly delinquent accounts.

    • The first delinquent account is currently in escrow and it is expected to close next week. Upon closing, we will receive approximately $58,000 in back dues, penalties and legal fees. This amount plus the approximately $74,000 that we collected in 2022-2023 on past due accounts totals $132,000. We will be using the funds that have been collected for our ongoing legal battle. We expect to prevail with the current lawsuit and anticipate the court will award us monetary damages and legal fees.

    • Last year, we were awarded a judgment of $174,000 plus 9% interest on the second delinquent account. With interest, we are currently owed $195,000. This judgement is secured by several dozen properties on Lummi Island. The judgement is being appealed, but by year’s end, we expect our award to be held up by the Superior Court.

Finance Report:

  • Leslie reviewed the proposed budget for 2025.

    There is a dues increase of $59/year for 2025. The primary reason for this is related to the recommended reserve deposit, which increased from $95,000 in 2024 to $140,000 in 2025. While the reserve specialists are aware that we intend to apply for a low-interest, 40-year loan for the new water treatment plant, until we secure the loan, the reserve study sees the cost of the treatment plant as an upcoming special assessment.

    The 2024 Reserve Report projects that at the end of 2024 LISECC will be 14% funded; fully funded would be $4,700,000, which includes the cost of the new water treatment plant. Once we receive the loan, the $4,000,000 for the cost of the plant will no longer be included in the calculations for the fully funded reserve balance and the percent funded will increase significantly.

Communications/Planning:

  • Jeff thanked the community for their willingness to volunteer and keep our association going.

Operations/Water Report:

  • Doug reported that the Clubhouse foundation repair was completed earlier this year and thanked Tim Robison for his dedication to the project.

  • Upcoming projects include continuing to investigate options for Clark Circle, the Clubhouse deck, the marina pilings and the new water treatment plant.

  • Leslie updated members on the Beach Ave. washout. Whatcom County has an approved design, which they intend to put out for bid with anticipated completion in the summer of 2025.

Election of New Directors:

Jim opened the floor for nominations for Board Members. No nominations.

Unfinished Business: None

New Business:

  • Sandra Clavero’s concerns about the Schedule of Fines were briefly addressed. Jim would like to discuss the Schedule of Fines further at the September Board of Directors’ meeting.

  • The board briefed the community on the sequence of events that have occurred on Carol Lane.

    • Mitch Nimon is the owner of a lot that abuts the road that goes around the lake. Mitch has ostensibly sold the lot to Dustin Wolfe. Together, they claim that they own Carol Lane, the community road that runs in front of their lot. Using this claim as the justification for their actions, Mitch and Dustin have:

      1.    Dumped several loads of gravel on Carol Lane.
      2.    Cut down a large maple tree that fell into the lake and left it there to degrade into our back-up water supply.
      3.    Installed a cattle gate across Carol Lane blocking access to three of the lots on Carol Lane and a LISECC water standpipe.
      4.    Posted private property signs and a camera on LISECC property at various points around the lake.

      • After consulting with Whatcom County Code Enforcement, LISECC was told that if the signs were posted on LISECC property, they could be removed. The signs were removed from two points; however, a third sign and the camera were left in place.

      • A few days after the signs were removed, Dustin destroyed a LISECC community sign at the lake. Dustin then proceeded to verbally attack Kevin Southworth and David Canterman at the water treatment plant. The situation became so volatile that staff called the Sheriff's Department to assist in de-escalation. Dustin was criminally cited for Theft 3 & Malicious Mischief 3.

    • Jim outlined the steps LISECC has taken to resolve the situation:

      1.    Jim had a lengthy conversation with Sheriff Tanksley.

    • 2.    LISECC was granted a Temporary Restraining Order (TRO) on September 20, 2024. The TRO required that the illegal gate on Carol Lane be removed and allowed LISECC staff to conduct necessary water testing and flushing on the standpipe located on Carol Lane.

    • 3.    A complaint was filed against Dustin Wolfe and Mitch Nimon in Superior Court on September 5, 2024.

    • 4.    LISECC has made reports to the Department of Ecology, State Department of Fish and Wildlife, Whatcom County Planning and Development, and Washington Department of Health.

    • 5.    Jim reported Dustin’s implied threat to the levy published on NextDoor to the Washington State Fusion Center, a clearinghouse for Homeland Security, the FBI, Law Enforcement Intelligence Units, the Seattle Police Department, and the Washington State Patrol.

There being no further business, Sharleen Peitsch-Tyerman motioned to adjourn the 2024 Annual General Meeting at 12:55 pm. Mike Zuccarini seconded. The motion passed.

 

Allison Cash
General Manager, Lummi Island Scenic Estates