MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS

OF THE

ARABIAN ACRES METROPOLITAN DISTRICT

Held: Friday, January 10, 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 and Joan M. Fritsche, Seter & Vander Wall, P.C., Dave Stanford, AquaTest, Inc., and Alan Matlosz of George K. Baum & Co.
Call to Order	Director Rupp noted that a quorum of the Board was present and therefore called the organizational 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 organizational meeting of the Board of Directors held December 6, 2002 were read, and upon motion duly made, seconded and unanimously carried, were approved.
Insurance Matters	Mr. Seter provided an insurance proposal from the Special District Association Liability Pool in the amount of $1,177 plus the payment of SDA dues of $200 for new members for joining the SDA, as a condition of obtaining the insurance through the Pool. Mr. Seter noted that the SDA Liability Pool appears to be the only entity willing to insure newly organized special districts, and that the District will be able to obtain additional quotes after it has been operating for one year or more, although such premiums tend to be high in comparison to the SDA’s quotes. Upon motion, second and unanimous vote, the Board determined to bind insurance coverage with the SDA Liability Pool.
Financial Matters	At this time no bills were presented for payment. Paul Goedecke has applied for the District’s EIN and PDPA Numbers. The Board executed the Application for Sales Tax Exemption.
Enterprise Resolution	Following discussion and upon motion, second and unanimous approval, the Board adopted a resolution acknowledging, affirming and establishing a Water Activity Enterprise in accordance with the Water Activity Enterprise Act and the TABOR Amendment.
Bank Account Resolution	Following discussion and upon motion, second and unanimous approval, the Board adopted a resolution authorizing AquaTest to open the appropriate District bank accounts.
Developer Advance and Reimbursement Agreement	The Board reviewed the advance and reimbursement agreement between the Arabian Acres Water Company, LLC, and the District for the purpose of authorizing the District to reimburse AAWC for the eligible organizational costs expended on its behalf and to authorize the District to reimburse AAWC for additional funds up to $20,000 advanced on behalf of the District. Upon motion, second and unanimous approval, the Board approved the Agreement with a revision to Section 7 – Notices, providing notice to each of the Directors as well as to the parties to the Agreement.
Asset Purchase Agreement	Mr. Seter reviewed the Asset Purchase Agreement between the Arabian Acres Water Company, LLC, and the District with the Board. The purpose of the agreement is to establish the procedure to be followed by the parties and documentation necessary to convey the assets of AAWC to the District. Ms. Fritsche requested a correction be made to the definition of Water Rights found at Section 1.1(q). A request was made that each Board member be provided with any notices given pursuant to Section 15.4. Upon motion, second and unanimous approval, the Board adopted a resolution approving the Agreement with the two changes noted above.
2003 Bond Issuance	Alan Matlosz of George K. Baum & Co., attended the meeting in his capacity as underwriter for the issuance of the District’s 2003 limited mill levy general obligation bonds. Mr. Matlosz gave the Board an overview of the bond issuance process and outlined the terms of the bond issuance and corresponding debt service analysis. Upon motion duly made, seconded and unanimously carried, the Board directed its consultants to move forward with issuing the maximum amount of debt authorized, as quickly as possible.
Manager’s Report	Mr. Rupp reported that Well No. 8 is now online. Mr. Stanford addressed an issue that arose last month over the installation of a new tap by a disgruntled District resident.
Attorney’s Report	Mr. Seter informed the Board that his office would be working with AAWC over the next several weeks on drafting or obtaining all of the documents contained on the closing list for the conveyance of the water system.
Other Business	The Board members reviewed the SDA Laws Notebook brought by Mr. Seter in response to a request that each Director receive a copy of Title 32 of the Colorado Revised Statutes. Directors Billings and Yoder expressed interest in obtaining copies of the Notebook. Mr. Stanford mentioned that the Notebook might be available online through the SDA’s website. The Board postponed purchasing a Notebook until the matter had been researched further.
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