MINUTES OF THE ORGANIZATIONAL MEETING OF THE BOARD OF DIRECTORS

OF THE

ARABIAN ACRES METROPOLITAN DISTRICT

Held: Friday, December 6, 2002 at 7:00 p.m. at 400 Midland Street, Suite 222, Woodland Park, Colorado.

Attendance	The organizational 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. and Dave Stanford, AquaTest, Inc.
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.
Director Matters	Mr. Seter confirmed that the oath of office for each director was filed with the Teller County District Court with a copy sent to the Division of Local Government. Next, Mr. Seter asked the Directors to complete an affidavit confirming the Director’s qualification to serve on the Board. Following discussion, the Board determined to elect the officers of the Board as follows: President: Kenneth R. Rupp Treasurer: Alan L. Jordan Secretary: Dennis S. Yoder Vice-President: Gene L. Billings Director: David J. Biondo
Disclosure Matters	Mr. Seter advised the Board that pursuant to Colorado law, certain disclosures by the Board members 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. Mr. Rupp reported that he had disclosed his interest as owning property located in the District and that he is presently the operations manager for the Arabian Acres Water Company, LLC which is owned by the Rupp Family Partnership, RLLLP. This disclosure is associated with approval of items on the agenda which may affect his interests. Mr. Billings reported that he had disclosed his interest as owning property located in the District. This disclosure is associated with approval of items on the agenda which may affect his interests. Mr. Jordan reported that he had disclosed his interest as owning property located in the District. This disclosure is associated with approval of items on the agenda which may affect his interests. Mr. Yoder reported that he had disclosed his interest as owning property located in the District. This disclosure is associated with approval of items on the agenda which may affect his interests. Mr. Biondo reported that he had disclosed his interest as owning property located in the District. This disclosure is associated with approval of items on the agenda which may affect his interests. Mr. Seter asked the Directors to review the information provided to each Director by his firm, describing how to identify a conflict of interest, and the requirements under Colorado law for disclosure of such conflicts of interest by each Director. Mr. Seter asked each Director to review the contents of the letter, and to identify all existing and potential conflicts of interest each Director may have in connection with serving as a member of the Board of the District, and to complete the enclosed disclosure forms to be returned to his office.
Organizational Resolution	Mr. Seter reviewed with the Board the proposed form of resolution regarding certain organizational and administrative items for the new District. Following discussion, and upon motion, second and unanimous approval, the Board approved and adopted the proposed resolution, incorporating the following items: The Board of the District determines that each director shall receive, as compensation for services as directors, the sum of $75 per meeting in an amount not to exceed $1,200 per annum in accordance with § 32-1-902(3), C.R.S., subject to availability of funds. The Board hereby adopts a corporate seal to be kept in the possession of the District’s legal counsel. The Board designates The Gold Rush as the newspaper of general circulation within the boundaries of the District, or in the vicinity of the District if none is circulated within the District, and directs that to the extent practicable, all legal notices shall be published in accordance with applicable statutes in The Gold Rush. The Board designates the intersection of Denwood Drive and County Road #42 as the posting place for notices of meetings which are not otherwise posted under Title 32, C.R.S. In addition, Regular and Special notices shall be posted at three public locations located within the boundaries of the District (the intersections of Trout Lake Road and County Road #42, Trout Haven Road and County Road #42 and Denwood Drive and County Road #42) and at the Teller County Clerk and Recorder's office. The Board determines to hold regular meetings on the second Friday of every month at AquaTest, 400 W. Midland Avenue, Suite 222, Woodland Park, Colorado commencing at 7:00 p.m. The Board shall obtain insurance for the District in the coverages and amounts deemed necessary by the Board. The Board appoints the law firm of Seter & Vander Wall, P.C. as general legal counsel for the District. The Board appoints L. Paul Goedecke, P.C., as the accountant for the District, who shall also be designated to submit to the Board a proposed budget for each ensuing year. The Board appoints JDS Hydro, as the engineer for the District. The Board designates Seter & Vander Wall, P.C. to serve as the official custodian of public records, as such term is defined in § 24-72-202(2), C.R.S. The Board appoints AquaTest as the District Manager. The Board designates the law firm of Seter & Vander Wall, P.C. to draft and distribute meeting agendas and draft and maintain official District minute book.
Liability/Insurance Matters	Mr. Seter advised the Board that, pursuant to statutory requirements, his firm has filed Directors’ and Treasurer Bonds for the Board of Directors with the Teller County District Court. Mr. Seter discussed the existence of liability exposure to board members and the protections from liability available pursuant to the Colorado Governmental Immunity Act and through the acquisition of public officials and general liability insurance. Mr. Seter distributed to each board member a proposed Indemnification Resolution; following discussion and upon motion, second and unanimous approval, the Board approved and adopted the Indemnification Resolution.
Financial Matters	At this time no bills were presented for payment.
2003 Budget Hearing	Mr. Seter reviewed the proposed 2003 District budget in detail. Following discussion and upon motion, second and unanimous approval, the Board approved and adopted the 2003 budget.
Appoint Bond Counsel And Underwriter	The Board appointed Diane Barrett, Esq. of Holme, Roberts & Owens as bond counsel and Alan Matlosz of George K. Baum and Associates as the underwriter.
Adopt Authorizing Consultants to Pursue Bonds/ Purchase of Water System	Following discussion and upon motion, second and unanimous approval, the Board passed a motion authorizing consultants to pursue acquisition of the Arabian Acres water system and issuance of bonds.
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