MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS

OF THE

ARABIAN ACRES METROPOLITAN DISTRICT

Held: Friday, January 9, 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: Kenneth R. Rupp Dennis Yoder Alan L. Jordan Gene L. Billings David J. Biondo Also present were Joan Fritsche and Joann Ebel, 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 December 12, 2003 were read, and upon motion duly made, seconded and unanimously carried, were approved as revised.
Financial Matters	Ms. Elzas reviewed the financial reports through December 31, 2003 and cash disbursements journal through January 31, 2004, which were accepted by the Board. The dual entry accounting format of the financial statements was well received by the Board. Ms. Elzas reported that she will provide the Board with a couple of sample budget to actual reports for the Board’s review next month. Mr. Stanford noted that Paul Goedecke was also pleased with the content and new format of the financial statements. The Board directed Ms. Elzas to transfer the $25,000 Rupp Family donation to the project fund and to break down AquaTest’s monthly billing charges into capital costs, maintenance, and administration categories on the general ledger account.
“Living Spreadsheet”	Director Rupp presented a current version of the “Living Spreadsheet” for the Board’s review. He noted that on the version of the spreadsheet the Board used at its November 15, 2003 meeting, the ending cash balance figure and the beginning cash available figure were not carrying forward. Director Rupp isolated the District’s Reserve Fund from the rest of the spread sheet and created a “Quick View” section, which needs to be updated manually from time to time. Director Rupp reported that the spreadsheet indicates that the District should retain a positive cash balance throughout the bond repayment period, assuming six taps per year, with an increase in the District’s tap fee and monthly service fee of 3% each year, and with reimbursing the Arabian Acres Water Company in full in fiscal year 2004. Director Rupp distributed a report he prepared using Teller County building permit data which indicated an assumption of six taps per year is a realistic, conservative figure. In order for the Board to use the spreadsheet for budget to actual comparisons, the spreadsheet will have to be modified to account for partial yearly figures.
Water Enterprise Resolution	Following discussion and upon motion, second and unanimous approval, the Board adopted a resolution acknowledging and affirming its Water Activity Enterprise in accordance with the Water Activity Enterprise Act and the TABOR Amendment.
Annual Administrative Matters	Director Qualification Affidavits. Ms. Ebel passed out affidavits for each director to complete confirming his ongoing eligibility to serve as a director of the District. Disclosure Matters/Conflict Disclosure Forms. Ms. Ebel also distributed copies of the conflict disclosure forms filled out by each director last year and asked the directors to review and revise their forms as necessary. Ms. Fritsche reported to the Board that Seter & Vander Wall will file “standing” disclosure forms for the directors with the Secretary of State’s office in January of 2004 and then on a discretionary basis prior to District Board meetings. Through 2003, conflict disclosure forms were filed prior to each Board meeting with the Secretary of State’s Office. Now that all matters relating to the water system purchase and bond issuance have been completed, disclosure filings prior to each meeting are not necessary. Election of 2004 Officers. The Board elected the following officers: President, Kenneth Rupp Vice President, Gene Billings Secretary, Dennis Yoder Treasurer, Alan Jordan Assistant Secretary, David Biondo Annual Administrative Resolution. Ms. Fritsche discussed a number of administrative matters with the Board, which are generally addressed at the Board’s first meeting of the year, in accordance with Colorado laws. The Board reviewed the proposed form of resolution presented by Ms. Fritsche, which provides direction from the Board regarding various administrative actions to be taken by its consultants on the Board’s behalf. Upon motion, second and unanimous approval, the Board adopted the annual administrative resolution. Renewal of Consultants. The Board reviewed the employment of its consultants, AquaTest, Inc., serving as the District’s manager and water system’s operator; Seter & Vander Wall, P.C., serving as the District’s legal counsel, L. Paul Goedecke, P.C., serving as the District’s accountant, and JDS Hydro Consultants, Inc., serving as the District’s engineer. Director Rupp passed out the contract that was entered into by Arabian Acres Water Company and AquaTest and subsequently assigned to the District at the time of purchase of the water system. The other three consultants are employed on an at-will hourly basis by the District. Upon discussion, the Board determined to renew its consultants for 2004, and directed Seter & Vander Wall, P.C. to draft a new management contract for review by AquaTest and the Board that better reflects the relationship between AquaTest and the District and complies with applicable laws governing special districts.
Manager’s Report	Water Tank Level Control System. Mr. Stanford reported that the new automated tank level control system is working well. The new system allows the water level in the tank to drop 13 feet before activating the wells. The purpose of dropping the water level is to minimize the amount of ice that builds up in the tank during the winter. 210 Tioga Trail. Mr. Stanford reported that he and Pete Kuyper, owner of Trout Haven Resort, have agreed upon the placement of the “Tioga Trail” main through Trout Haven Resort. There is a small change in the line design. The line will run approximately 600 feet. Mr. Stanford reported that AquaTest has been in contact with the McGhees. Due to the timing of construction, they will not need water for a few months, eliminating the need for winter excavation work. Mr. Stanford will present bids to the Board closer to the anticipated construction date. The Board directed Mr. Stanford to install a fire hydrant along the line at an additional cost of approximately $2,000. Regular Special District Election. As part of the annual administrative resolution, the Board appointed Beth Elzas as the Designated Election Official (DEO) for the regular special district May, 2004 election. Two director terms end in May, 2004. Director Rupp indicated he did not intend to run again and Director Yoder has not decided if he will run again. Ms. Fritsche reminded the Board that the election may be cancelled 63 days prior to the election if there are no more candidates running for office than positions to be filled and there are no other items on the ballot. A discussion followed concerning interest expressed by constituents in running for office and the likelihood of the election taking place. Upon motion, second and unanimous approval, the Board authorized holding a mail ballot election in order to increase voter turn out. Director Billings was directed to post the notice of election and self nomination and acceptance forms on the District’s website, once they are available from the DEO. Director Billings is also working on the District’s newsletter and will include information about the election and how to obtain self nomination forms.
Attorney’s Report	Acquisition of Trout Haven Line. Ms. Fritsche informed the Board that a meeting had taken place with Mr. Kuyper on December 29, 2003 concerning the terms of the acquisition agreement, easement deed and bill of sale for the conveyance of the “Trout Haven” main to the District. The terms and location of the “Tioga Trail” main easement were also discussed. Mr. Kuyper approved the revised documents and Director Rupp prepared the appropriate exhibits and facilitated execution of the documents by Mr. Kuyper. The purchase price of the main is $42,048.00 at zero percent interest. As compensation for the main, the Infrastructure Acquisition Agreement requires the District to pay P-K Enterprises, Inc. the sum of $3,000 from every tap fee paid to the District from all taps which connect to the Trout Haven main and requires the District to credit 50% of tap fees purchased by the Trout Haven Resort for commercial taps towards the purchase price of the Trout Haven main. Any balance remaining on the purchase price is due and payable by the District on December 31, 2015. Upon motion duly made, seconded and unanimously approved, the Board approved the Infrastructure Acquisition Agreement and accepted the Bill of Sale and Easement Deed for the Trout Haven main. Tioga Trail Main Easement Deed. Ms. Fritsche reported that she expects to have the Tioga Trail main easement deed executed by Mr. Kuyper before the next Board meeting, now that the line location has been agreed upon by the parties. Legal Description of District. Ms. Fritsche reported that Judge Colt signed the order amending the District’s legal description to match the narrative description and maps depicting the District’s boundaries. Copies of the motion and order were sent to the subject property owner and a copy of the order was filed with the County Assessor prior to the end of the year. No further action is required on this matter. Water Court Decree. Ms. Fritsche reported on the status of the petition to amend the District’s water decree to allow for outside sales. Dave Lindholm expects to have the draft petition revised and ready for filing with the Water Court by the end of the month.
Other Business	District Rules and Regulations. Issues concerning provisions in the District’s Rules and Regulations arose at several points during the meeting. The Board directed Ms. Fritsche to draft a provision increasing the District’s tap fee and monthly service fee automatically each year by the rate of the Denver/Boulder CPI and to draft provisions for commercial tap fees and commercial usage charges. (Director Yoder abstained from voting.) Agendas and Meeting Packets. In order to assist the Board in being prepared for Board meetings and in an effort to decrease the length of Board meetings, the directors requested that the agenda and meeting packets for Board meetings be distributed by AquaTest on Tuesday, prior to the Friday Board meetings. Any agenda items or documents to be brought before the Board should be sent to AquaTest by Monday. Due to the timing of invoices, Ms. Elzas may have additional entries to the check register after the meeting packets have been distributed. Rules and Regulations/Construction Water. Some of the directors have received complaints from new customers concerning availability of construction water and installation of new taps. The Board requested confirmation from Mr. Stanford that the District’s Rules and Regulations are accurately written and for an explanation of District procedures. Mr. Stanford indicated that contractors, in general, understand and follow the District’s requirements for connecting a tap. Homeowners either do not read the Rules and Regulations or simply cannot follow them. Mr. Stanford indicated he expects District procedures to be followed and he does not waste his time or the District’s time if specifications have not been met. His role is to enforce the District’s Rules and Regulations. District E-mail Addresses. Director Billings reported to the Board that the District’s website server has installed a “spam stopper,” which required some reconfiguration of e-mail addresses in order for everyone to continue to receive e-mails through the metro district address.
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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