Well Project Update Letter to Owners

Dear Neighbors:

On Tuesday, January 10th the Davenport Rim Condominium Association held a well project update meeting for interested neighbors. About a dozen households were represented. Matt Felder, who has provided volunteer leadership for the project, gave an update regarding changes since last year’s annual meeting. Two representatives from the drilling vendor, Hydro Resources, were also present. The presentation can be viewed HERE, and we urge anyone who was not present to read it as it answers the majority of questions you may have about the project.

Key points are that our original driller neglected to include some expensive elements, including an 8” backflow preventer required by the City of Austin; our new vendor (Hydro Resources) is a full-service provider with extensive experience with similar projects; and total cost for the well is likely to be double the amount we had planned for. In the past year, City of Austin water charges and drainage fees have increased significantly, and now account for 40% of the dues increase initiated last June. In order to proceed with the project, the Board foresees the need for an additional $40/month increase in dues if the well is productive.

The presentation, discussion and Q&A at the Jan 10 meeting lasted about two hours. Many valid concerns from residents were discussed during the presentation. Although understandably disappointed with the cost increase, at the end of the presentation the general response from the residents was positive with several caveats:

· The Board would solicit references for Hydro Resources from recent customers who installed similarly large and complex systems.

o Hydro provided more than 10 references, including Barton Springs Edwards Aquifer Conservation District; Roy Seiders (owner of Yeti) whose residential irrigation well is nearly identical to our project; and Brookfield Residential, a large real estate development company with 3 recent projects.

· An independent construction consulting company would be retained for cost and contract review, and periodic construction status updates.

o Sterling Silver secured the assistance of CD Construction Consulting and a representative from Stratus Properties to assist with a review of the project. They have met with the vendor and are working thru questions and suggestions for value engineering and a critical path schedule.

· The project, and payment, would be done in stages, with the understanding that poor water quality or insufficient flow rate would lead to capping the well and terminating the project.

The Board of the Association intends to move forward on the project, and has secured a $350,000 line of credit which can be drawn down as needed to cover the cost of the well project and other pending capital projects. The loan is to be amortized over 10 years.

The board has also gladly accepted the volunteer assistance of neighbor Paul Gamel to determine if it is possible to address the issues with the current irrigation controller before replacing it. If successful, this could save additional cost to the overall irrigation improvement efforts.

Once permits are secured, the well will be drilled and tested before increasing dues (on the small chance that the well will not be usable). Dues are expected to increase by $40/month, as described in the presentation, if the well is productive. If the well is not productive a smaller increase will likely be needed to pay-off the estimated $30k drilling expenditure.

The well will be located near the Canonero entrance to the neighborhood, and the storage tank will be located down in the greenbelt between our neighborhood and Bold Ruler, on land that is owned by the Association. The well will provide irrigation water only (not household/potable water), and is expected to give us 3 to 4 times the watering capacity we have now, expanded over 7 days a week, at a cost ~9X lower than City water. The chief benefit is the ability to maintain a healthy landscape in the common areas and in individual yards, enhancing our collective property values.

If you have any questions, please respond to this email. All comments will be reviewed by the Board members and management company.

For the Davenport Rim Condominium Association:

Barbara Koenig, Kay Silver, Randy Imhoff and Matt Felder