MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS

OF THE

ARABIAN ACRES METROPOLITAN DISTRICT

Held: Friday, February 14, 2003 at 7:00 p.m. at 400 Midland Street, Suite 222, Woodland Park, Colorado.

Attendance	The regular meeting of the Board of Directors of the Arabian Acres Metropolitan District was called and held as shown above and in accordance with the statutes of the State of Colorado. The following Directors were in attendance: Kenneth R. Rupp Dennis S. Yoder Alan L. Jordan Gene L. Billings David J. Biondo Also present were Kim J. Seter, Seter & Vander Wall, P.C., Dave Stanford, AquaTest, Inc., and Daniel Seter.
Call to Order	Director Rupp noted that a quorum of the Board was present and called the regular meeting of the Board of Directors of the Arabian Acres Metropolitan District to order.
Disclosure Matters	Mr. Seter advised the Board that written disclosures had been filed 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. The Board determined that the participation of the members present was necessary to obtain a quorum or otherwise enable the Board to act.
Public Comment	No members of the public were present.
Approval of Minutes	The minutes of the regular meeting of the Board of Directors held January 10, 2003 were read, and upon motion duly made, seconded and unanimously carried, were approved.
Financial Matters	Mr. Stanford informed the Board that checks have been ordered for the District.
Bond Issuance	The Board reviewed and discussed the updated cash flow analysis provided to each Board member earlier in the week by Alan Matlosz, Underwriter with George K. Baum & Co. The Board had several questions about how certain numbers were derived and why certain assumptions were made in the cash flow analysis. Upon motion duly made, seconded and unanimously carried, the Board decided to hold a special meeting on Friday, February 28, 2003, for purpose of reviewing the analysis in detail and running different cash flow scenarios, altering the terms of the bond issuance and repayment schedule in order to verify that repayment of the bonds is feasible under differing financial scenarios. The meeting is scheduled for 7:00 p.m. at the County Assessor’s office where power point projection facilities are available.
Update of System Conveyance	A presentation of the water system assets being purchased by the District, along with copies of the supporting documentation was given by Mr. Rupp. Mr. Rupp highlighted a few issues that arose through the due diligence process that Mr. Rupp felt the Board should be aware of. Mr. Rupp specifically highlighted the fact that the water main across Trout Haven Resort does not belong to Arabian Acres Water Company and cannot be conveyed to the District. An agreement with Mr. Peter Kuyper for use of the main will be assigned.
Manager’s Report	Dave Stanford reported that the water system was functioning normally.
Attorney’s Report	Kim Seter reported that the Bond work was proceeding and handed out a Preliminary Financing Schedule, a Source and Use of Funds report and Contact List from George K. Baum and Company to each Director. He also handed out a draft Certified Record of Proceedings and a draft Preliminary Limited Offering Memorandum to each Board member for their review.
Other Business	The Board approved posting Approved Meeting Minutes on the AAPOA and THPOA websites, along with a disclaimer stating that the official Approved Meeting Minutes are available for review at AquaTest’s office by motion duly made, seconded and unanimous vote. The Board directed Mr. Billings to research the District options for developing a website and proceed with setting up a District website.
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