MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS

OF THE

ARABIAN ACRES METROPOLITAN DISTRICT

Held: Friday, June 11th, 2004 at 7:00 p.m. at 400 W. Midland Avenue, Suite 250, Woodland Park, Colorado.

Attendance	The regular meeting of the Board of Directors of the Arabian Acres Metropolitan District was called and held in accordance with the statutes of the State of Colorado. The following Directors were in attendance: Alan L. Jordan Radford Walker Dennis S. Yoder Gene L. Billings David J. Biondo Also present were Kurt Dahl, Teller County Environmental Health Officer; Ray Russell, Jr. of Mason Russell West, LLC; Dave Stanford, Debbie Stanford and Beth Elzas with AquaTest, Inc. and Ken Rupp, District property owner.
Call to Order	Director Billings noted that a quorum was present and called the regular meeting of the Board of Directors of the Arabian Acres Metropolitan District to order.
Disclosure Matters	Director Billings asked the Board to confirm that no changes have occurred to any of the Directors’ interests that warrant amending the written disclosures on file with the Secretary of State’s Office with regard to any potential conflicts of interest. Pursuant to Colorado law, certain disclosures may be required prior to taking official action at the meeting. The Board reviewed the agenda for the meeting, following which each Board member disclosed their conflicts of interest, stating the fact and summary nature of any matters, as required under Colorado law, to permit official action to be taken at the meeting.
Public Comment	Kurt Dahl, the Teller County Environmental Health Officer spoke regarding the West Nile virus and the preventive measures that can be taken to guard against becoming ill. It was noted that this information is available also at the Center for Disease Control’s website and brochures are available at the AquaTest office. Dave Stanford pointed out that there may be Grants available through the Center for Disease Control.
Approval of Minutes	Director Billings requested that the format for the meeting minutes be returned to the previous format of Seter and Vander Wall’s. A discussion ensued as to the form of the minutes for posting to the web site and the language of the minutes. In the section of the ‘Election of New Board Member/President and Swearing in,’ it was pointed out that the last sentence regarding Director Walker’s abstaining from voting on the previous month’s meeting minutes should be moved to the section ‘Consent Agenda.’ Director Yoder requested that a sentence be added to the AquaTest Contract section stating, “Director Yoder requested time to review the Agreement before voting.” The minutes of the regular meeting of the Board of Directors held May 14th, 2004 were read, and upon motion duly made, seconded and unanimously carried, were approved as revised above.
Financial Matters Other Business (Appointment of Consultant) Financial Matters (Continued)	Ray Russell, Jr. of Mason Russell West, LLC, the District auditor, gave a preliminary report on the yearly audit. Discussion ensued concerning the District’s proper accounting of Property Taxes and whether the County would wire transfer Tax Revenues directly into the Districts Bond Fund account. AquaTest stated that they would make the inquiry to the County and update the Board. Mr. Russell inquired as to the existence of any promissory note issued along with the Advance and Reimbursement Agreement between the District and the Arabian Acres Water Company. Mr. Rupp stated that he believed that one existed and that he would check into the matter and send a copy to Mr. Russell. Discussion continued regarding the requested bookkeeping changes made by the District Accountant, Paul Goedecke. In an effort to keep the District Auditor up to speed with the District Accountant, it was decided to forward a copy of the requested changes of Mr. Goedecke’s to Mr. Russell. After Mr. Russell’s report and Board discussion, a motion was made to accept the preliminary audit. The motion was seconded and unanimously carried. A motion was made to appoint Ken Rupp as a non-paid private consultant to the Board for the District, along with full access to all professionals, books, records and documents of the District, as needed and as directed by the Board. The motion was seconded and unanimously carried. Beth Elzas presented the District’s Quarterly/Monthly Financials Report, Cash Disbursements, Bond Payment and Accounting Procedures. Discussion ensued regarding the first bond payment the District was obligated to pay by June 1. Beth Elzas reported this payment has been made, even though payment was initially routed incorrectly by Zion’s Bank. The funds for the payment of District’s bond debt of $45,324.00 were obtained from the Bond Fund, $13,494.91; the Capitalized Interest Fund, $14,907.11, and from the District checking account, $16,921.98. A motion was made for the Board to approve the payment of claims and the financial statements for the District. The motion was seconded and unanimously carried.
District Operations Discussion	Financial and accounting issues of the District operations were satisfactorily covered in earlier discussions. Director Billings suggested tabling further discussions on District operations as of time constraints on the meeting. All Directors were in agreement. District operations discussions were tabled until the July meeting.
Manager’s Report	Dave Stanford, the District Manager, presented the water system monthly report and its operation. Mr. Stanford brought before the Board the issue of a District water customer’s water meter not being installed at 40 Lady Lane and of the customer repeatedly turning on their own water service after it being turned off by the system manager for noncompliance of District Rules and Regulations. Mr. Stanford recommended the District giving the customer a 48-hour notice of complete water service termination unless the customer once again achieved compliance. The Board directed Mr. Stanford to proceed. Well No. 5. Discussion ensued regarding present District finances and potential costs to the District for re-drilling Well No. 5 at this time. Mr. Rupp stated that well exploration and well development is extremely critical for the District and should not be tabled as of a low point in District finances, but should proceed until such time that the District finds it can not fund the project, at which time, the project can be discontinued without a large outlay of funds, until the District can, once again, fund the project. Mr. Rupp pointed out that the permit application cost is very minimal to the District and that the main concern for the District is the time factor involved with the permitting process and the well driller’s and excavator’s schedule to actually bring a new well on line. The District Manager recommended holding on moving forward with any other capital improvements until such time as the District finances had improved, as he felt that the time factor to bring a new well on line would not be that great. A motion was made to put the process of re-drilling Well No. 5 on hold until the District’s finances improve. The motion was seconded and unanimously carried.
Attorney’s Report	Mr. Rupp is continuing to work with the City of Colorado Springs Utilities and Camp Iana in an attempt to obtain an easement for the District’s 2” main that exists within CSU’s easement on Camp Iana property to the West of the western entrance to Arabian Acres. Mr. Rupp let the Board know that the process may be a lengthy one, but Mr. Rupp feels that it will be successful. Further updates will be given as movement takes place. Mr. Rupp updated the Board regarding the Petition to Amend the Water Court Decree as per Mr. Lindholm’s letter included in the Director’s packets. Mr. Lindholm would like to proceed with submitting a new water right decree with a 2004 priority date. The Board directed Mr. Lindholm and Mr. Rupp to continue up to the total $5000.00 limit for expenses for this project.
Other Business	Information was presented by Director Billings concerning the Special District Association Conference scheduled to be held in Steamboat Springs September 22-24, 2004. The cost for the main damage at 290 Deer Ridge Trail, due to their contractor cutting the main, has been billed to the owner. A discussion ensued regarding the excessive water usage experienced by Candace Gerrard, as per Ms. Gerrard’s letter to the Board. AquaTest was directed by the Board to notify Candace Gerrard that unless the meter could be found to be faulty, the amount due to the District is valid.
Adjournment	There being no further business to come before the Board, and upon motion duly made, seconded and unanimously carried, the meeting was adjourned at 10:15 p.m.

Secretary for the Meeting