MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS

OF THE

ARABIAN ACRES METROPOLITAN DISTRICT

Held: Friday, November 19, 2004 at 7:00 p.m. at 400 W.

Midland Avenue, Suite 250, Woodland Park, Colorado.

Attendance Executive Session	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: Gene L. Billings Radford K. Walker Dennis S. Yoder David J. Biondo Director Alan L. Jordan was absentexcused, pursuant to 32-1-905(1)(g), C.R.S. Also present were Dave Stanford and Nancy Reeder with AquaTest, Inc.; Ken Rupp, private consultant to the District; and Joan Fritsche of Seter & Vander Wall, P.C. A motion was made for an Executive Session of the Board of Directors for determining positions relative to matters that may be subject to negotiations, developing strategy for negotiations and instructing negotiators as per CRS 24-6-402(4)(e). The motion was seconded and unanimously carried. The Board was in Executive Session from 7:00 pm to 8:00 pm.
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 at 8:00 pm.
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.
Approval of Minutes	The minutes of the regular meeting of the Board of Directors held October 15, 2004 were read, and upon motion duly made, seconded and unanimously carried, were approved. A copy of the October 15, 2004 minutes was signed by Director Yoder.
Financial Matters 2005 Budget Hearing	Director Jordan had emailed to everyone his report on the financial overview of the District as of October 31, 2004. The tap fee received in October went into ColoTrust increasing the balance in that account to $33,166. The bond payment is due Dec. 1st for $45,323.75 and there is a balance in the bond fund of $48,082.70 so that account will have a remaining balance of $2,758.95. Monthly financial statement and expenses were reviewed. In addition to the checks listed on the check register, a $150.00 check (#1319) for Director Al Jordan was written to replace two lost checks (#1151 and #1167) for $75 each. The Board directed Ms. Reeder to put a stop payment order on the lost checks to prevent fraud. A motion was made for the Board to approve the financial statements as presented. The motion was seconded and unanimously carried. Director Walker questioned the "bond costs" and "organizational costs" on the balance sheet as showing as assets. The Board directed Ms. Reeder to ask either Paul Goedecke or Ray Russell for an explanation of these items. A discussion ensued regarding mileage reimbursement for Director Walker, who drives over 200 miles round trip to attend the Board Meetings. Director Yoder suggested the District reimburse Director Walker half of the IRS rate of 37.5¢ per mile. Director Biondo suggested a flat fee. A motion was made to reimburse Director Walker $40 per meeting for his mileage, payable in a check separate from his directors fee check, on the days that Director Walker is not already in the area to attend other meetings. The motion was seconded and unanimously carried, with Director Walker abstaining. Regarding the Budget Amendment for 2003, Ms. Reeder presented Paul Goedecke's October 20, 2004 email, which states "There should not be anything remaining to do on the 2003 budget as the audit has been completed and filed and there was not (sic) indication of any violation of Colorado budget law so you should be ok." The Budget Hearing portion of the meeting was opened at 8:31 as advertised as the Official Public Budget Hearing meeting of November 19, 2004 in the Gold Rush. No members of the public were present, and the Public Hearing was closed at 8:32. The Directors reviewed and briefly discussed the most recent copy of the 2005 budget. A motion was made for the Board of Directors adopt the 2005 budget as presented, appropriate sums by fund expenditurexpenditures by funde and certify the mill levy of 12 mills. The motion was seconded, and unanimously carried.
District Operations Discussion	a. Administration: The Board directed Mr. Stanford and/or his employees to contact Mr. Rupp when there are problems within the District, as Mr. Rupp is very familiar with the system and its quirks. Mr. Rupp clarified that he would like to be contacted for unusual problems and situations only, such as the leak in the CSU easement, not day-to-day items. c. System Operations: The Board held a discussion regarding Mr. Stanford's plan for preventative maintenance. Mr. Stanford stated that controls are replaced fairly regularly due to lightning strikes. Meters tend to slow down with age and should be replaced every 8 to 10 years. The meters manufactured today will most likely last longer than the ones being replaced. In general, valves should be operated annually to ensure that they are working properly. Mr. Stanford reminded that Directors that lack of money is an on-going issue with maintenance, and that maintenance work will be done as money allows. For example, the valve boxes damaged by the County while grading, cost approximately $100 each, plus excavation costs and require a road cut permit. In another example, Mr. Stanford noted that when flushing hydrants, the water must first be de-chlorinated before being released onto the ground. The de-chlorination equipment is expensive. Director Walker questioned if it was feasible for several Districts to get together, purchase the equipment as a group and share it as needed. Ms. Reeder will provide Director Walker with a list other Districts in the area, so he can approach them with this idea.
Manager’s Report Attorney’s Report Other Business Adjournment	Mr. Stanford reported that the system is working well. The District has received the re-drill permit for Well #5. The concrete pad for Well #8 will be postponed until May or June 2005, when weather and funds will permit the construction. Beginning in March 2004, the State of Colorado requires a monthly test for chlorinated systems. In addition to the monthly test and report, a report also has to be filed quarterly showing the averages for the quarter. Regarding the Camp Iana easement, Mr. Rupp stated nothing has really progressed since the last meeting. The easement is being prepared in-house by CSU, and Mr. Rupp is still waiting for it. After a brief discussion regarding Ms. Fritsche's involvement in this issue, the Board directed Mr. Rupp to provide Ms. Fritsche with his finalized version of the easement for her review, before presenting the easement document to Camp Iana. Regarding the Augmentation and Exchange Water Court Decree, Mr. Rupp stated that David Lindholm spoke with Bradford Benning, the attorney for Highland Lakes Water District. Mr. Benning had some negative comments about the plan, but Mr. Lindholm feels these are not justified. Therefore, the Augmentation and Exchange plan is still in the negotiation stage and Mr. Lindholm will continue to consider various other strategies regarding this action. Mr. Rupp reviewed the Trout Haven Resort Easement for the Vacated Roadway Property, showing the Directors a map and pointing out the area in question. After a brief discussion and in response to Mr. Rupp's question regarding the transferability of the original easement acquired with the Trout Haven Resort main, to the vacated roadway property, Ms. Fritsche stated that, in all probability, if this is part of the same line the District obtained the easement for last year, then it is still a valid easement. Mr. Rupp has more to do to determine if the original easement has transferred to the newly created properties of the vacated roadway area. Ms. Fritsche presented a draft "Third Amended and Restated Advance and Reimbursement Agreement" between Arabian Acres Metropolitan District and the Arabian Acres Water Company, LLC for consideration. The Directors discussed several options, and decided to wait until the end of the year to determine the precise financial status of the District at that time and what, if any amount, can be paid to the Arabian Acres Water Company, LLC. Director Billings reported on the meeting with Teller County regarding the UNCC locate issue with Teller County Department of Transportation, held in Cripple Creek earlier this month. The problem has arisen out of the wording in Senate Bill 184, which was not revised to omit the word "grading" from excavation terminology in the Bill. Teller County Department of Transportation has interpreted this to include motor or road grading. The intent of the Bill was to mean lot excavation or grading. The cost of the locate calls (emails) themselves at 94¢ each plus the cost of actually doing the locates is costing the District and others in the county considerable amounts of money. Mr. Stanford noted that he has spoken with CSU about joint-purchasing the markers necessary to permanently mark the valves to save money. CSU has provided the name of the supplier, who will give the District the same rate as they give CSU. Mr. Stanford also commented that now that the meeting with the County has been held, and that the County and not just the Department of Transportation is aware of the problem, the problem might be resolved in the near future. Director Billings asked Ms. Reeder to provide him with a list of other Districts in the area so he could contact them regarding this issue. The Directors discussed the Trout Haven promotional letter and Director Walker presented a list of ‘brain storming’ ideas compiled from last month's meeting. Ms. Fritsche reminded the Directors that any reduction in fees or incentives to tap into the District must be justifiable and equitable to all constituents. Tap fees are meant to fund future capital projects, not to buy wells. Ms. Fritsche will review the ideas suggested and get back to the Directors with her comments. Director Biondo suggested that the District consider sending out a simple informational letter to the Trout Haven main area residents, with no mention of special incentives or discounts. Director Billings asked Director Biondo to develop such a letter for the Board's review. Director Billings stated that he will be preparing the next newsletter soon, and would like the District Manager to prepare something suitable for the newsletter, possibly information on maintenance or system operation. There being no further business to come before the Board, and upon motion duly made, seconded and unanimously carried, the meeting was adjourned at 10:25 PM. _________________________________________ Secretary for the Meeting