May 14, 2003 Minutes-Board Meeting

A meeting of the Board of Directors of the Lower Arkansas Valley Water Conservancy District was held on Wednesday, May 14, 2003 at 1:00 P.M., McDonald Hall- Room 120-Otero Jr. College, 1802 Colorado Avenue, La Junta, Colorado.

President Leroy Mauch announced a quorum was present.

DIRECTORS PRESENT:

Leroy Mauch - President
John Singletary-Vice President
Pete Moore-Treasurer
Wayne Whittaker
Loretta Kennedy
Ollie Ridley- Secretary
Melissa Esquibel

DISTRICT STAFF:

Julie Scaplo-General Manager
Bart Mendenhall-Attorney
Kim Chavez-Administrative Assistant

EXCUSED MEMBER:
Ollie Ridley- Secretary

VISITORS PRESENT:

Rodney Baird, Rocky Ford Daily Gazette; Phil Reynolds, Southeastern Colorado Water Conservancy District; Andrea Rich, La Junta Tribune Democrat; Rachel Merrill, CWPDA; Steve Witte, Colorado Division of Water Resources; Doug Melcher, Southern High Plains Ground Water Management District; Ben Rodriquez, City of Rocky Ford Government; Laura Kelly, Redwine-Kelly Financial; Rob Redwine, Redwine-Kelly Financial; Walter Myer, Dan Henrichs, Highline Canal; John Thatcher, SCA Insurance Co.; Donald L. Ullom, Ullom Brothers; Dave Reyher, Colorado East Bank & Trust.

INTRODUCTION OF VISITORS: President Leroy Mauch welcomed each of the visitors to the meeting, and asked them to introduce themselves and identify the organization they represented.

APPROVAL OF MINUTES: President Mauch asked if the members of the Board had received their copy of the minutes of the April 9, 2003 Board meeting, and whether there were any corrections or additions. Hearing none, Loretta Kennedy moved, seconded by Melissa Esquibel, to approve the minutes. Motion unanimously carried.

PRESIDENT'S REPORT: Leroy Mauch stated he had no report to mention.

TREASURER'S REPORT:
Treasurer Pete Moore reported that the financial report for the month had been mailed with the Board meeting minutes of April 9, 2003 He reported the financial report to date total revenues $601,374.71 with expenditures totaling $114,536.29. No correction were heard, Mr. Moore asked to accept the financial report dated April 30, 2003. Mr. Mauch moved, seconded by Mr. Wayne Whittaker, to accept report. Motion unanimously carried.

LEGAL REPORT:
Attorney Bart Mendenhall reported there has been a second High Plains Groundwater case but he has not filed the opposition. The opposition is due the end of May, 2003. Per Board request he has looked into the standing with the Bureau of Reclamation. He spoke with the attorney for the Southeastern District who have been dealing with the Bureau for years, reported commissioner Keyes will be coming to Pueblo to work out a deal.

PERSONNEL COMMITTEE REPORT:
Chairman Wayne Whittaker reports General Manager, Julie Scaplo and Administrative Assistant, Kim Chavez are now on board. Issues that will be addressed will be health insurance and retirement. Memorandum of Agreement was signed by President Leroy Mauch, and Administrative Assistant Kim Chavez.

GENERAL MANAGER'S REPORT:

• Personnel Policy: General Manager Julie Scaplo asked if the members of the Board had received their copy of the Employment and Personnel Policy Manual and whether there were any corrections or additions. Hearing none, Mr. Whittaker moved, seconded by Melissa Esquibel, to accept Personnel Policy. Motion unanimously carried.
• Strategic Planning: Strategic Planning Workshop in Canon City, Colorado, May 2-3, 2003 with Board members and General Manager Julie Scaplo directed to strategic planning and direction, and review the mission of the Lower Arkansas Valley Water Conservancy District. General Manager Scaplo asked if the members received a copy of the report Strategic review compiled by the facilitator Paul Fanning, and whether there were any corrections he would like to know. Julie also wanted to publicly thank Paul Fanning for his time and great job he has done.
• Ballot information: Request for Ballot information for Otero County, coordinated election to be held in Otero County will be November 4, 2003 all other Counties will have the same dates. Otero County sent out a questionnaire, which will need to be returned by July 28, 2003.
• Storage Option: Storage options Plan update range from $1,370 per- acre foot to $1,560 per acre-foot for PSOP of Pueblo, Storage available just over 5000 acre-feet. Phil Reynolds stated Turquoise would be cheaper, but Turquoise has other issues that will have to be addressed. Turquoise has not been spoken for at all, legislation will authorize study on enlargement of Pueblo Reservoir only, and it does not talk about enlargement of Turquoise at all. General Manager Scaplo will send a letter addressing the request 5000 acre-feet of storage. Catch up finance charges are unknown at this time. Phil Reynolds gives a brief explanation of catch up charges. Phil Reynolds states over a $100,000 of expenses have been paid by participants, new participants will be pro-rated at a percent of their acre-feet they are buying, this changes the ratio, and therefore a catch up charge brings the new participant back with the entities who have been participating.
• Money Market Savings: Money Market Savings account has been established at Colorado East Bank & Trust with interest rate of 1.3%.
• Arkansas Valley Conduit Pipeline: General Manager is attending Arkansas Valley Conduit Pipeline meeting and they are looking for entities to donate. Lower Arkansas Valley Water Conservancy District does have money in the budget to donate to other Water Projects; it would be the General Manager's recommendation to authorize $10,000 to the Pipeline. The Southeastern Water Conservancy District will
  match any other funds received from the entity in the District. The next Arkansas Valley Conduit meeting will be May 20, 2003. Leroy Mauch moved, seconded by Mr. Whittaker, to approve $10,000 donation. Motion unanimously carried.
• SDA Work shop: The Special District Association (SDA) will be holding the 2003 workshop" Is your District Board Going in all Directions?" With no Direction?" to be held in Colorado Springs on June 18th. Registration and payment will need to be received by May 27th, so if any member would like to attend contact Julie before deadline.
• New Location: There is a possibility we may need a larger location. The old June Chevrolet building is vacant which is at 966 Elm Ave in Rocky Ford, CO. The space is an open area measuring 40 x 33 and will need some improvements. Lease of the building will be $400.00 per month this price includes utilities. Mr. Bill Gates is the current owner and he is willing to do all needed improvements, his estimate is approximately $1000.00; which could be done within 30 days. The cost will be the Lower Arkansas Valley Water Conservancy Districts responsibility. The area will be large enough for Board Meetings; it also has large parking area, with the area being in the center of the District. It was the recommendation of the Board that a Committee form regarding improvements to the location. It was decided to give the General Manager authority to negotiate with Mr. Gates up to a level of $5,000 for improvements to be specified in a request for proposal agreement. Loretta Kennedy moved, seconded by Melissa Esquibel. Motion unanimously carried.
  
  REDWINE INVESTMENT PRESENTATION:
  Simple IRA program would be ideal for two employees. It's a retirement program similar to the 401k program without all the administrative costs, the 401k plan work best for larger group of employees. The two ways to make contribution are as follows:
  1. Employee can make contribution up to $8,000 per year
  2. Employers make a contribution one of two ways, 2% of all the employees or 3% for those who agree to contribute their own money.
  Mr. Redwine will meet with the employees to set risk tolerance. Mr. Wayne Whittaker moved, seconded by Mr. John Singletary to accept 3% of employee's contribution. Motion unanimously carried.

ENTERPRISE FORMATION RESOLUTION:
The Enterprise is established for the purpose of pursuing, establishing, and continuing water activities as a business, separate and distinct from the Lower District's governmental activities. The business of the Enterprise shall involve the purchase, sale, and management of water. The Enterprise's activities may include (without limitation) planning, engineering, water acquisition, use, reuse, storage, augmentation and mitigation of depletions from wells within Lower District boundaries, exchange, supply, distribution and administration activities ("Enterprise water activities"). Loretta Kennedy moved, seconded by Pete Moore to accept resolution. Motion unanimously carried.(Item #16 handout)

DIVISION ENGINEER PRESENTATION:
Mr. Steve Witte gives discussion of Legal Principles Pertaining to Changes of Water Rights in the Arkansas River Basin of Colorado, and Conversion of Water from Agricultural to Higher Valued Uses in the Arkansas River Valley. Informational tables on irrigation acreage data along with Tabulation of major decrees in Districts 14, 17 and 67. Mr. Witte offered to the Lower Arkansas Valley Water District a gift. The gift is a map which covers the entire Arkansas River Drainage Basin which identifies the major reservoirs, tributary and all major ditches below Pueblo. Mr. Witte was thanked by the Board.

SCA INSURANCE PRESENTATION:
Mr. John Thatcher explains different types of coverage offered for review for employee of LAVWCD
Anthem 30-250-10/30/50/30%
Office Visit/Spec. Copay: 30/50 Lab, Xray No Copy
Deductible: None Rx $10/30/50/30%
Inpt Hospital: $250 Copay per day up to $1,000 Life Ins(20,000) $16.00
Outpt Surg. $200 per procedure
ER Room $100 per visit

Julie Scaplo recommended the Anthem Plan VS Rocky Mountain Plan. Wayne moved, seconded by Loretta. Motion unanimously carried to approve the Anthem 30-250-10/30/50/30%. This plan will be in effect starting July 1, 2003. Since the coverage will not be effective until July, it is Julie Scaplo recommendation that COBRA payments for Kim Chavez, and Julie Scaplo totaling $ 1,699.23 will be paid by LAVWCD. Mr. Whittaker moved, seconded by Loretta Kennedy. Motion unanimously carried for COBRA Payments.

DOUG MELCHER'S PROPOSAL:
Doug Melcher with Southern High Plains Ground Water Management District gave discussion regarding overhead diversions, which do not follow the five county lines, also recoverable Ground Water in the Prowers County portion of the Southern High Plains Designated Ground Water Basin. Mr. Melcher proposal is to fund certain projects exclusive within the Prowers County Portion of SHPGWMD, that being all of Division I and that portion of Division II of the SHPGWMD that lies within Prowers County. The calculations are based on LAVWCD generated revenue he estimate at 1,400,000 x .042= $58,800.00 dedicated for use within Southern High Plains Prowers County for the term of 30 years. The other alternative would be Article 45 Water Conservancy District 37-45-137 Exclusion of Land.

Ø 37-45-137. The owner in fee of any lands constituting a portion of any district, regardless of the valuation for assessment of such district, or, if the valuation for assessment of an existing district is less than three hundred million dollars, not less than fifteen owners of land in an overlapping area as described in section 37-45-109 (3) (d) who are petitioners for the formation of a new district proposed to be organized under this provision of this article which includes lands within such existing district, may file with the board a petition praying that such lands be excluded and taken from said district. Petition shall describe the lands which the petitioner desires to have excluded. Such petition must be acknowledged in the same manner and form as required in case of a conveyance of land and be accompanied by a deposit of money sufficient to pay all costs of the exclusion proceedings.

Mr. Melcher would like to know what that amount of money would be, as mention above.
Bart Mendenhall responded to the question by saying he and the General Manager would have to compile information and get back with him at next Board Meeting. Question asked by Mr. Melcher regarding decision made by Judge to exclude SHPGWMD from district, will the LAVWCD appeal decision. The Board has opposed the decision during Board Meetings in December 2002 and January 2003. Mr. Melcher would like copies of Board Meeting dated December 2002, and January 2003. Julie Scaplo will make copies.

NEW BUSINESS:
President Mauch read out loud a letter from President of Colorado East Bank & Trust Lamar, Mr. Reyher, which explains issues he feels need to be address, they were as follows:

1. Commission an appraisal of all of the canal companies lying within the boundaries of the Conservancy District to provide base-line financial data. Upon completion, this information needs to be made available to landowners so that they have the basis to make a financial decision on the granting of an easement.
2. Engage a law firm that specializes in conservations easement so that definite answers to questions can be made available in a timely manner. Landowners will then have a resource to fall back on for legal issues concerning the easements.
3. Engage an accounting firm that has experience in the easement process for the same reason outlined above.

Vice President John Singletary would like information regarding appraisal, legal, and accounting for basic cost estimates needed to aid with conservation easements. Tom Brown and Richard White at Grimsley & White do have the experience needed.

WALTER MEYER:
Mr. Meyer wanted to let the Board know of his service, he has years of experience in grants, Portfolios, different types of water Conservation Easements, water bank, and water research, etc. New Senate Bill 1010 has money for grants; he can handle most anything needed. He feels most farmers get information from the coffee shop, Mr. Meyer feels he can clarify and give the correct information. The price of Mr. Meyer service will be $40.00 per hour. President Mauch stated the need for Ditch Bank Data Base. Vice President Singletary adds the need to enhance Eco-Development in the Valley, Dean Pickle in La Junta, Colorado may be in need of Greenhouses, and possible drip system and augmented water. Mr. Singletary feels we are going to keep water in the Valley we need to keep the value in the Valley.

STEALEY AGREEMENT:
Loretta Kennedy reports on producing two videos the first video would be an overview of the Mission of Lower Arkansas Valley Water Conservancy District. Total cost for video #1 will be $ 15,000. Video #2 would be information, example of water banking, water easements, and different types of water conservation easements. This video would be an aide to disseminate information to the public. The cost for video #2 will be $10,000. Melissa Esquibel added CSU may be able to help with the video.

OFFICE FURNITURE ESTIMATES:
Treasurer Pete Moore would like an estimate for cost of new office furniture needed for new location. Julie Scaplo will work on estimate and submit at later date.

QUESTION FROM AUDIENCE:
Mr. Don Henrichs, Superintendents of Highline Canal asks the Board how they feel regarding leasing water, after further discussion. Loretta Kennedy responds to question by stating the Board would like the use of all TOOLS needed, our mission is acquisition, retention, and conservation of water that benefits the Valley. President Mauch states the Board is in favor of leasing.

Mr. Doug Melcher mentions the water for the pickles are in High plains, and the proposal would be best. If you benefit Southern High Plains you will benefit the valley.

President Mr. Mauch requested the Board to enter into Executive Session. Melissa Esquibel moved, seconded by Loretta Kennedy to enter Executive Session. Motion unanimously carried.

Executive Session for the purpose of: C.R.S. 24-6-402(4)(e): (Determining positions relative to matters that may be subject to negotiation; developing strategy for negotiation; and instructing negotiators)

*President Mauch recessed the District meeting to convene into Executive Session at 4:05 P.M. to discuss the Ullom Option. He adjourned the Executive Session at 4:40 P.M., and reconvened the District Meeting.

Melissa Esquibel moved, seconded by Loretta Kennedy to accept Ullom option agreement #1. Did not have a unanimous vote, a roll call vote was requested. Results as follows:

Loretta Kennedy- Yes
John Singletary- Yes
Pete Moore- Yes
Melissa Esquibel- Yes
Leroy Mauch- Yes
Wayne Whittaker- Nay
Record shows five in favor and one not in favor.

PETER NICHOLS & ROBERT TROUT:
Peter Nichols and Robert Trout presented a legal service agreement which the Board received prior to today meeting. The agreement will expire December 2003. President Mauch moved, seconded by Loretta Kennedy to accept legal service agreement. Motion unanimously carried.

ASSISTANT SECRETARY:
It was noted that an assistant secretary is needed for the Board. Julie Scaplo will be assistant Secretary when Ollie Ridley is absent. Melissa Esquibel moved, seconded by Loretta Kennedy. Motion unanimously carried.

ADJOURNED:
President Leroy Mauch asked if there were any other questions or other matters to come before the Board, hearing none, adjourned the meeting at 5:02 pm.