MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS

OF THE

ARABIAN ACRES METROPOLITAN DISTRICT

Held: Friday, December 12, 2003 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: Kenneth R. Rupp Dennis Yoder Alan L. Jordan Gene L. Billings David J. Biondo Also present were Joan Fritsche, Seter & Vander Wall, P.C.; Dave Stanford and Beth Elzas, AquaTest, Inc.
Call to Order	Mr. Rupp 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	Ms. Fritsche advised the Board that written disclosures had been filed with the Secretary of State’s Office with regard to any potential conflicts of interest and that 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	No members of the public were present.
Approval of Minutes	The minutes of the regular meeting of the Board of Directors held November 14, 2003 were read, and upon motion duly made, seconded and unanimously carried, were approved as presented. The minutes of the continued regular meeting of the Board of Directors held on November 15, 2003 were read, and upon motion duly made, seconded and unanimously carried, were approved as presented.
Financial Matters Past Due Accounts	Ms. Elzas reviewed the financial reports through November 30, 2003 and cash disbursements journal through December 31, 2003, which were accepted by the Board. Director Rupp requested that the Account Register report include all of the prior month’s entries so that the Board could readily track the District’s activity on an ongoing basis. Ms. Elzas reported that customers Novarowski and Nuessle received the certified notification letter and have not brought their accounts up to date. Ms. Nuessle’s written response to the letter was not clear, but did indicate her intent to relinquish the tap. Upon discussion, the Board directed Director Rupp to draft a reply to Ms. Nuessle and also to Ms. Novarowski informing them of the economic benefit of owning a water tap and stating that their taps will be revoked on December 31, 2003 if some form of payment is not received by the District office on December 30, 2003.
2004 Budget	At 7:40, Director Rupp opened the public hearing on the 2004 budget. There being no members of the public present, Director Rupp closed the hearing. Copies of the proposed budget for 2004 prepared by Paul Goedecke which included the final assessed valuation figure from the County were distributed to the Board. Following motion by Director Jordan, second by Director Yoder, and unanimous vote, the Board approved a resolution adopting the District’s 2004 budget, appropriating the funds and certifying a debt service mill levy of 12 mills, all as set forth in the budget.
Manager’s Report	Water Tank Level Control System. Mr. Stanford reported that a pressure-sensing device for the water tank has been installed in the Silbani Lane control building. Using this procedure to control water levels in the tank eliminates the need for the DSL line and issues with lightening damage to the equipment in the tank. Construction Disclosure Schedule. Mr. Stanford reviewed the status of the ten items listed on the Construction Disclosure Schedule, dated March 31, 2003, which was prepared by Arabian Acres Water Company in conjunction with the sale of the water system to the District: 1) Wellhead #8 – completed. 2) MPA testing Wells 3 and 5 – will be conducted in the spring of 2004. 3) Water Storage Tank level control – completed. 4) Water Main Connections – no action to date. 5) Pressure Reducing Valve – no action to date. 6) Chlorine Contact Time – no action to date. 7) Source Water Assessment and Protection – ongoing project updated annually. 8) Control Cable – the District is no longer using the DSL line. The District is utilizing a “dry” pair of lines, which run from the Tower to Control Building A on Silbani Lane. Mr. Stanford has contacted Qwest regarding the possibility of running “dry” lines to Control Building B. 9) Possible System Leaks – appear to be minimal at this time. Tap Applications: 210 Tioga Trail. A tap application was submitted to the District and accepted as complete. The revised cost estimate to install a line off of the Trout Haven Resort main is approximately $14,000. Upon motion duly made, seconded and unanimously approved, the Board authorized AquaTest to inform the owner that the application has been accepted provided that an easement for the line is obtained from Trout Haven Resort. The Board directed AquaTest to inform the applicant of its decision. 503 Banner Trail. Tap application pending. 290 Deer Ridge Trail. Tap application pending. If the two outstanding applications are submitted in December, eight taps will have been issued in 2003. Accounting Practices. Mr. Goedecke reviewed the financial reports included in the meeting packet and prepared a recommendation for the Board’s review. Mr. Goedecke recommends AquaTest use a dual entry accounting system and preparing budget to actual reports for the Board’s review each month. The “Living Spreadsheet” could be converted for this purpose. A discussion followed concerning miscommunication over Mr. Goedecke’s role as District accountant and the bookkeeping services provided by AquaTest. The Board directed Ms. Elzas to review AquaTest’s current software capabilities and coordinate with Mr. Goedecke on producing a set of auditable books for 2003 and revising current accounting practices.
Attorney’s Report	Acquisition of Trout Haven Line. Ms. Fritsche informed the Board that a meeting has been set with Mr. Kuyper on December 29, 2003 to finalize an agreement for the acquisition of the 4” water main owned and maintained by Trout Haven Resort (the “Main”) and for approval of an easement for a line to extend from the Main to Tioga Trail. The Board directed Ms. Fritsche to commit $3,000 from each tap received which connects off of the Main toward the purchase of the Main and to allow the District to make additional payments at its discretion until the Main is paid for. Legal Description. Ms. Fritsche requested Board approval to seek an order from the District Court to amend the District’s legal description to conform to the narrative description of the District and boundary maps utilized throughout the District’s formation process. Director Rupp explained to the Board that the metes and bounds legal description attached to the District Court Order forming the District severed part of Lot 2R, Arabian Acres Subdivision Filing No. 3 from the District. A copy of the pleading will be mailed to the owner of Lot 2R. Upon motion, order and unanimous approval, the Board directed Seter & Vander Wall to proceed with amending the District’s legal description. Arabian Acres Water Company, LLC Advance and Reimbursement Agreement. Director Rupp removed himself from the office of President for this agenda item and abstained from participating or voting on this matter. Director Biondo was appointed as acting President. Upon motion duly made, seconded and unanimously approved, the Board authorized execution of the Advance and Reimbursement Agreement and Promissory Note with the Arabian Acres Water Company, LLC, for the budget year 2004. Petition to Amend Water Court Decree. Ms. Fritsche reported that she informed David Lindholm that the Board wished to proceed with filing a petition with the Water Court to amend the Decree in Case No. 94CW281 to provide for the temporary sale of surplus water. Mr. Lindholm indicated he expected to file the petition before the end of the year.
Other Business	Due to the late hour, upon motion duly made, seconded and unanimously carried, all other agenda items were continued to the next meeting.
Adjournment	There being no further business to come before the Board, and upon motion duly made, seconded and unanimously carried, the meeting was adjourned.

Secretary for the Meeting

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