To serve all DC Ranch stakeholders through the professional management and protection of the community’s fiscal and environmental assets. DC Ranch Association delivers high quality and consistent operations, landscape, maintenance and security services with an emphasis on customer care and open communication that result in sustained property values and an exceptional quality of life.

DC Ranch Association Mission Statement

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Principles of Civil Dialogue

Respect and diversity ofthought are valued atDC Ranch. Civildialogue should beused when addressing

the Board, another resident, or a DC Ranch staffmember.

3

Call to Order

Roll Call of Board Members

• Susan Grace President• Elizabeth Kepuraitis Vice President• Mike Esparza Treasurer• Dr. Philip Geiger Secretary• Vince Durocher Director• Fred Green Director• Stephen Koven Director

4

Public Comment

We want to hear from our residents.There are at least two opportunitiesfor the Board to hear from residents.There is a public comment period atthe start of every meeting. Residentscan speak for up to three (3) minutes.Comment cards should be completedbeforehand and presented to DarrenShaw, Executive Director.

Also, prior to a board action, residentsare provided with an opportunity tocomment for up to three (3) minutes.

5

Meeting AgendaFebruary 4, 2019

• Call to Order • Establish Quorum• Member Comment Period• Approval of Prior Meeting Minutes

- January 7, 2019 Regular Meeting Minutes• President’s Comments• Neighborhood Voting Member Update (Sterling)• Executive Director’s Report • 2018 Year End Financial Report

Unfinished Business 1. Proposed Policy 106 - Neighborhood Voting Members2. Allocation of Neighborhood Legal Fees and Costs (Proposed Resolution)

New Business 3. Policy Review 4. Speed Camera Expense Allocation (Proposed Resolution)• Committee Reports • Announcements• Adjournment

6

Approval of Minutes

• January 7, 2019 Regularly Scheduled Board Meeting

7

President’s CommentsSusan Grace

• January 14, 2019 Governance Meeting Update• February 4, 2019 Executive Session Update• Conversations in the Park

8

Neighborhood Voting Member UpdateJohn Hendrickson – Sterling (T4B)

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Executive Director’s Report Darren Shaw• Executive Assistant/Human Resource Administrator – Natasha Bell. • Aaron Largo’s Resignation – Jamiee Lynn’s promotion. • Irrigation training (4 days) $3,400 and 64,000 in irrigation improvements/IPADS for irrigators.

- Stand alone vs cloud system- Water savings (see slide ahead)

• McDowell Sonoran Conservancy working with our team to remove common area noxious weeds.• The culvert at hole 18 (DC Ranch) underneath Tapadero (450 ft) – (see slide ahead). • The culvert at 1871 grading and berm work is complete in upper canyon – (see slide ahead). • Home Improvement Workshop scheduled (Landscape and Painting) – April 10, 2019.• Asphalt work to start in May/June ($344,000 – Reserve Plan).• Anderson officers are now CPR certified.

- Purchasing three new AEDs• A drone purchase is scheduled for aerial view inspections.• Five resident license plate reader cameras being installed at manned gates. • Reflectors installed on interior of all manned gates.• Recommendation to Finance Committee re: reserve investments and associated fees. • Board Candidate Forms available as of February 1- three board positions term April 1 (see slide ahead). • Amended Tax Returns were filed for 2015 and 2016 (under the assumption we’ll be granted 501(c)4 status).• Subterranean termite treatments now underway at Market Street Villas.• Proposed rule for driving more than 11 mph over posted speed limit adjacent to parks is out for member

comment.• NVM Training was conducted on January 31.• Fun Fact – How many vehicles enter the neighborhoods via the manned gates? (see slide ahead).

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Irrigation Water Savings (4th Quarter)Darren Shaw

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Water Use in Gallons 2017 2018 Change

%

Change

December 12,268,738 5,812,917 -6,455,821 -52.62%

4th Quarter 46,658,830 21,677,003 -24,981,827 -53.54%

Annual 147,219,382 130,417,382 -16,802,000 -11.41%

Water Bill

Expenditures 2017 2018 Change

%

Change

December $38,571 $21,261 -$17,310 -44.88%

4th Quarter $144,847 $76,339 -$68,508 -47.30%

Annual $435,801 $416,798 -$19,003 -4.36%

Culvert and Grading Under Tapadero Darren Shaw

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Culvert and Grading Under Tapadero Darren Shaw

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Culvert and Grading Work at lot 1871 Darren Shaw

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Annual Meeting/Election ScheduleDarren Shaw

• February 1: Candidate forms are posted on DC Ranch.com• February 4: Election kick-off at board of directors meeting • March 4: Deadline for candidate applications (5 p.m. at Ranch

Offices)• March 18: Meet the candidates event (6 p.m. at The Homestead) if

needed• March 19: Ballots mailed to neighborhood voting members and

residents• April 1: Election results are announced at the annual meeting (6

p.m. at The Homestead)

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Vehicles Cleared/Manned GatesDarren Shaw

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Guest LaneWestgate: 327,618 (2017: 311,180)Eastgate: 123,326 (2017: 110,623)Windgate: 312,977 (2017: 296,884)Horseshoe Gate: 262,386 (2017: 260,881)Arcadia Gate: 86,484 (2017: 76,342)

Total: 1,112,791 (2017 Total: 1,055,910)

Resident LaneWestgate: 327,408 (2017: 311,072)Eastgate: 123,301 (2017: 110,641) Windgate: 312,902 (2017: 296,749)Horseshoe Gate: 262,267 (2017: 260,780)Arcadia Gate: 83,070 (2017: 72,556)Arcadia Back Gate: 81,084 (2017: 72,610)

Total: 1,190,032 (2017 Total: 1,124,408)

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2018 Year-End Financial Statement Review Director of Financial Operations Dee Nortman

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Statement of Revenue and ExpenseFor the Year Ending December, 2018

(000’s)

Twelve Months Ending

December 31, 2018

Actual Budget Difference

Revenue:

Assessments 6,888.0 6,894.4 (6.4)

Non-Assessments 912.9 905.9 7.0

Total Revenue 7,800.9 7,800.3 0.6

Costs:

Operating Cash Costs 6,348.8 6,448.8 100.0

Reserve Funding 1,309.6 1,309.6 -

Operating Non-Cash Costs:

(Bad Debt & Depreciation) 7.7 24.0 16.3

Total Costs 7,666.1 7,782.4 116.3

Net Income (Loss) 134.8 17.9 116.9

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RevenueFor the Year Ending December 31, 2018

(000’s)

6,888.0

912.9

6,894.4

905.9

6,735.7

832.9

-

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

8,000.0

Assessments Non-Assessments

Actual Budget Prior Year

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ExpensesFor the Year Ending December 31, 2018

(000’s)

6,348.8

1,309.6

7.7

6,448.8

1,309.6

24.0

6,079.9

1,221.8

23.6 -

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

Operating Cash Costs Reserve Funding Operating Non-Cash Costs: (Bad Debt & Depreciation)

Actual Budget Prior Year

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Balance Sheet – Assetsat 12/31/18

Cash 898,048$

Reserve Funds - Wells Fargo 7,935,894

Reserves-Accrued Interest Receivable 21,270

Accounts Receivable

Accounts Receivable 51,870

Reserve for Bad Debt (13,779)

Total Accounts Receivable 38,091

Community Council Receivables -

Other Assets

Prepaid Insurance 45,749

Prepaid Corporate Tax 3,019

Prepaid Expenses 2,785

Total Other Assets 51,553

Fixed Assets

Property & Equipment 265,685

Accumulated Depreciation (204,629)

Total Fixed Assets 61,056

Intangible Asset - Lease Gain 13,248

Total Assets 9,019,160$

22

Balance Sheet – Liabilities and Equityat 12/31/2018

Liabilities

Short Term Liabilities

Accounts Payable 392,587$

Prepaid Assessments 230,035

Prepaid Council Assessments 0

Accrued Payroll 61,999

Insurance Payable 2,401

Other Short Term Liabilities 36,763

723,785

Long Term Liabilities

Note Payable-Ford Focus 63,905

Equity

Reserve Contribution 7,815,783

Association Equity 47,739

Desert Haciendas Equity 11,514

Terrace 1.13 West Equity 16,558

Park & Manor Equity 17,402

Country Club Equity 34,958

The Estates Equity 14,481

Terrace 1.14 East Equity 5,041

Rosewood Equity 5,350

2.13/2.14 Equity 15,068

Haciendas Equity 4,410

Market St Villas Equity (8,158)

Montelena Equity 6,965

Parks at Silverleaf Equity 33,037

Arcadia at Silverleaf Equity (1,041)

Horseshoe Canyon/Canyon Villas Equity 67,275

The Sterling Estates at Horseshoe Canyon 10,294

Net Income (Loss) 134,794

Total Equity 8,231,470

Total Liabilities and Equity 9,019,160$

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Statement of Cash Flowsfor year ending December 31, 2018

Twelve Months Ended

December 31, 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Net operating income for period ended December 31, 2018 134,794$

Adjustments to reconcile net income (deficit) to cash provided

by operating activities

Depreciation 14,114

Amortization of intangible lease gain 8,038

(Increase) decrease in

Accounts receivable 148,231

Prepaid expenses 27,140

Increase (decrease) in

Accounts payable 20,005

Accrued payroll expenses 2,054

Prepaid assessments 42,926

Prepaid Community Council assessments 0

Intercompany payables (119,581)

Other short term liabilities 15,944

NET CASH FROM OPERATING ACTIVITIES 293,665

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment (4,996)

CASH FLOWS FROM FINANCING ACTIVITIES

Principal payments on long-term debt (3,437)

NET INCREASE (DECREASE) IN CASH 285,232

CASH, BEGINNING OF PERIOD 612,816

CASH, END OF PERIOD 898,048$

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Cash BalanceEnd of Month

Unfinished Business

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Proposed Policy 106Neighborhood Voting Members Phil Geiger

.

• This proposed policy defines the NMV program. • It provides direction regarding processes and expectations associated with the NVM program.• It establishes primary duties, such as:

- Preparation and training- Voting and elections - Terms- Neighborhood Committee involvement - Removal - Communication

• It adjusts the total NVM count from 43 to 44. • NVMs were asked to comment.• All comments were reviewed by the Policy Committee and addressed in writing for board

consideration.- Revisions were made to several areas of the proposed policy.

• This proposed policy was presented at the December 10, 2018 and January 7, 2019 board meetings. It is back once again with further revisions.

• Additionally, there are unsettled provisions that require board input.• The Board can conditionally approve this policy for the 30-day member comment period per

Policy 102. 26

Allocation of Neighborhood Legal Fees Darren Shaw

• This matter was discussed at the January 7, 2019 board meeting; the discussion was tabled.

• Past practice has been that the Ranch Master absorbs legal fees and costs for the neighborhoods, with only a couple exceptions through the years.

• The CC&Rs provide that neighborhood expenses are defined as the actual and estimated expenses which the Association incurs or expects to incur for the benefit of Owners of Units within a particular neighborhood or neighborhoods.

• A resolution setting policy with regard to this matter is proposed. 27

New Business

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Policy Review Phil Geiger

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• Pursuant to 102.5 Annual Policy Review: The Board of Directors shall annually receive and review the current policies and determine if revisions are required. Proposals to modify, add or delete policy language shall follow the standard policy approval procedure.

• Copies of all approved policies were sent to the Board on January 17, 2019.

Speed Camera Cost Allocation Darren Shaw

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• On March 6, 2017, the Board authorized the Executive Director (ED) of the Association to acquire the SafePace speed camera system.

- The Board agreed that the acquisition cost should be amortized over a five-year period with the amortized costs charged to the Country Club and Silverleaf villages by an algorithm to be determined by the ED and approved by the Board.

• At a December 10, 2018 executive session of the Board (with legal counsel present), the Executive Director proposed that the roughly $30,000 expense be absorbed by the Ranch Master Association and that all fine revenue for excessive speeding be posted to the Ranch Master Association as well. The expense to be amortized over three years.

- This approach allows the speed camera to be used in all DC Ranch Association neighborhoods, rather than being restricted to the manned-gate neighborhoods.

• See the accompanying resolution in board packet.

Additional Discussion ItemsCommittee Reports

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Announcements

• The next regularly scheduled board meeting - Monday, March 4, 2019, at 6 p.m. at The Homestead Community Center.

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Adjournment

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