May 11, 2005 Minutes-Board Meeting

The regular monthly meeting of the Lower Arkansas Valley Water Conservancy District Board of Directors was held on Wednesday, May 11, 2005 at 9:30AM, , in the Visitors Center of John Martin Reservoir State Parks, 30703 County Road 24, Hasty, CO 81044.

Chairman Singletary announced a quorum was present.

DIRECTORS PRESENT:
John Singletary-Chairman
Wayne Whittaker-Treasurer
Ollie Ridley-Secretary
Leroy Mauch
Melissa Esquibel
Loretta Kennedy

DIRECTORS EXCUSED:
Pete Moore-Vice-Chairman

DISTRICT STAFF:
Jay Winner-General Manager
Bart Mendenhall-Attorney
Peter Nichols-Water Attorney
Kim Chavez-Financial Coordinator
Randa Morlan-Administrative Assistant

MOTION TO ENTER INTO EXECUTIVE SESSION:
Director Esquibel moved that the Board convene into Executive Session under the C.R.S. sections for the following purposes, seconded by Director Kennedy. Motion unanimously carried. Chairman Singletary recessed the District meeting at 9:31 A.M. to convene the Executive Session at 9:37 A.M.

C.R.S. 24-6-402(4)(a): "Concerning the purchase, acquisition, lease, transfer, or sales of any real, personal, or other property interest."
C.R.S. 24-6-402(4)(b): "Conferences with an attorney for the public entity for the purposes of receiving legal advice on specific legal question."
C.R.S. 24-6-402(4)(e): "Determining positions relative to matters that be subject to negotiations; developing strategy for negotiations; and instructing negotiators."
C.R.S. 24-6-402(4)(f): "Personnel matters except if the employee who is the subject of the executive session has requested an open meeting, or if the personnel matter involves more than one employee, all of the employees must request an open meeting."

To discuss the following matters:

The presence of the following persons was requested at this Executive Session:

Chairman Singletary adjourned the Executive Session at 10:32 A.M, and reconvened the District Meeting at 10:41 A.M.

REPORT FROM EXECUTIVE SESSION:
Mr. Bart Mendenhall reported the Executive Session covered the following issues:

MOTION TO ENTER INTO WATER ACTIVITY ENTERPRISE:
Director Esquibel moved that the Board convene into the Water Activity Enterprise, seconded by Director Mauch. Motion unanimously carried.

At the conclusion of the Water Activity Enterprise meeting Director Esquibel moved to reconvene the District Meeting at 10:43 A.M., seconded by Director Kennedy. Motion unanimously carried.

INTRODUCTION OF VISITORS:
Chairman Singletary welcomed each of the visitors to the meeting, asked them to introduce themselves and identify the organization which they represent.

VISITORS PRESENT:
Rodney Baird, La Junta Tribune Democrat; Brad Henley, Colorado State Parks; Mike French, Colorado State Parks; Brenda Fillmore, AGUA; Allison Cortner, Senator Salazar's Office-Pueblo; Virgil Cochran, Lamar Daily News; Dannie McMillan, City of Lamar; Chris Woodka, Pueblo Chieftain; Phil Reynolds, SECWCD; Doris Morgan, Senator Allard's Office-Pueblo and Patrice Gapen, Colorado State University-Pueblo-Healy Business Center.

Chairman Singletary thanked John Martin Reservoir State Parks for allowing the District to hold their meeting at the Visitors Center and for sharing their facility.

Brad Henley- John Martin Reservoir State Parks welcomed everyone to John Martin Reservoir and gave a brief update of the park. He announced that John Martin consists of 28,000 acres with 1,700 acres being state park. He reported that the water level is currently at its highest (63,500 acre feet) since the State Parks opened on August 12, 2001.

DIRECTOR WATER UPDATE:
Director Mauch reported that the Purgatoire River, Fort Lyon Canal and Amity Ditch have been running fairly full and water levels seem to be better this year than the last five years.

Director Ridley reported that the Las Animas Consolidated Ditch has been running well and the water tables seem to be higher.

Director Whittaker reported that the Holbrook Ditch has also been running and that Catlin Canal has had about 1/3 more of winter water storage this year.

APPROVAL OF MINUTES:

April 13, 2005 Monthly Board Meeting Minutes- Chairman Singletary asked if the Board members had reviewed the minutes for the April 13, 2005 Board Meeting, and whether there were any corrections or additions. Director Esquibel moved to approve the April 13, 2005 Board Meeting Minutes, seconded by Director Mauch. Motion unanimously carried.

TREASURER'S REPORT:
Director Whittaker reported that the financial report for the month of April was included in the Board's Monthly Meeting Packet. He reported April total revenues of $202,293.27 and total expenditures of $182,652.31. Director Whittaker moved to accept the April Financial Statement, seconded by Director Esquibel and carried unanimously.

PRESENTATIONS:
Jay Winner- General Manager Winner gave a brief presentation and small demonstration on water quality and water exchanges. He reported that the first allocation of the Bureau of Reclamation is 30,000 acre feet and that the District is hoping to offset the majority of the deficit owed to Kansas this year.

Peter Nichols- Water Attorney Nichols reported that the grant application had been submitted to the Drought Emergency Committee. He reported that the District should be able to deliver more than half of the deficit.

EXECUTIVE SESSION REPORT:
Water Attorney Nichols reported that the Executive Session covered conservation easements that were accepted by the District in 2003. He noted that two or three easements had been accepted and about 20 turned down.

Attorney Nichols noted that there were 45 million dollars in conservation easement tax credits generated in 2004 in the state of Colorado. He added that 1/3 of the tax credits were from the lower valley. Attorney Nichols noted that a majority of these easements were apparently gravel easements accepted through Greenland's Trust. He added that 150 or more conservation easements are reportedly being investigated.

General Manager Winner noted that the Zacher easement had been received by the Conservation Resource Center and that the District has another conservation easement in progress with Colorado Canal property which he hopes to make public and use as an example of a proper conservation easement.

Attorney Mendenhall reported the IRS has been investigating conservation easements in the Lamar area and that he and Attorney Nichols are investigating to see if there is anything the District can do to help any farmers who may be affected from bad conservation easements.

Attorney Nichols commended the Board for not accepting unsupported conservation easements, but said the Board has been ready for 18 months to accept conservation easements with proper appraisals.

Chairman Singletary noted that the Executive Session also covered the potential water purchase with several partners including the State Parks and Wildlife. He noted that the negotiations on PSOP were also addressed and said he is pleased with the Districts progress with Colorado Springs and Pueblo Board of Water Works. He added that he is personally disappointed in Aurora's lack of effort in the negotiations on PSOP.

Virgil Cochran-Lamar Daily News questioned whether conservation easements can be looked at by the IRS before they are accepted.

Water Attorney Nichols answered that it can be done through a private letter ruling but it would take time and money.

Additional discussion followed on the acceptance of conservation easements.

Attorney Mendenhall reported that Mr. Stroh has been suspended from the American Society of Farm Managers and Rural Appraisers. He noted that Mr. Stroh will have to complete certain education courses within a two year period and if not, his membership would be terminated. He added that Mr. Stroh will not be doing conservation easement appraisals until he is reinstated.

PRESENTATIONS (CONTINUED):
Randa Morlan-Administrative Assistant Morlan reported that she had attended the La Junta Elementary School on Friday, April 29, 2005 and Manzanola Elementary on Tuesday, May 3, 2005. She added that with each school she spoke with approximately 100-120 children on water conservation. She noted that on Friday, May 13, 2005 she will visit Fowler Elementary and on Wednesday, May 18, 2005 she will visit Crowley Elementary.

GM REPORT:
General Manager Winner reported on a handout of the Colorado Draft White Paper which uses wet lands to clean the water. He also announced a proposal from CSU-Fort Collins on studying Canola and if it would be feasible to use in the valley for Biodiesel.

He reported that on May 25, 2005 he will attend a meeting with the Colorado Water Conservation Board to discuss the operation of the District and water quality.

General Manager Winner asked for the Boards support in the start of opting draft legislation so that in 2006 the District can put to the vote of the people the water quality issues when it comes to water exchanges.

COMMITTEE REPORTS:
Water Acquisition- General Manager Winner reported that the District had purchased the 52 shares of Colorado Canal water and traded 122 shares of Colorado Canal water for 32 shares of Twin Lakes water last month. He added that they will be closing on the Holbrook of about 250 acres later in the month.

Chairman Singletary suggested the Board meet before the next Board meeting to discuss where they are on their negotiations and PSOP.

Personnel- Director Kennedy noted that the Directors have a copy of the employee handbook with the recent revisions and asked that the Board review the revisions and said she hopes to have the first 16 pages approved by the next Board meeting.

Liaison- Director Kennedy reported that General Manager Winner, Chairman Singletary and Attorney Mendenhall have all been attending negotiations on PSOP.

Director Mauch noted that he had been receiving calls from people wanting to lease the Districts LAWMA shares. Directors suggest General Manager Winner and Director Mauch work on leasing the LAWMA shares.

Chairman Singletary reported on his trip to Washington, D.C. and noted that he met with Senator Ken Salazar, Congressman Joel Hefley and Representative Mark Udall. He noted that he heard good regards on Director Whittaker's attendance on the Conduit and that he met with the Bureau of Reclamation and the EPA on water quality.

LEGAL REPORT:
High Plains A&M- Attorney Mendenhall reported that the reply briefs for High Plains and ISG have been filed. He noted that he looked into the addition of property to the District and said there are several methods. One method being the owners of the lands desiring to be included within the District may petition the Board, which after a notice and hearing may include the land. Another method is by filing with the District Court signed by not fewer than twenty-five percent of the owners of irrigated land and five percent of the owners of land within an incorporated town or city. Other owners then have an opportunity to counter-petition. The Court then holds a hearing and may include the property, if no proper counter petition has been filed. Alternatively, twenty-five percent of the owners of irrigated lands and ten percent of the electors of the area may file a petition with the Court, seeking an election. If successful at the election the land will be included. Attorney Mendenhall added that it does not appear that the District has the authority to create an enterprise zone for tax breaks. He noted that it did appear that almost the entire District is included within an existing enterprise zone.

Water Attorney Nichols reported on the House Bill (HB05-1177) on Interbasin Compacts and its potential concern to the District.

PRESENTATIONS:
Patrice Gapen- Colorado State University briefly went over the marketing conservation innovation grant for drip irrigation. She noted that Financial Coordinator Chavez had done a great job and the grant will need submitted by May 23, 2005.

Director Whittaker moved to approve the conservation innovation grant for drip irrigation, seconded by Director Mauch and carried unanimously.

General Manager Winner noted that he expects their next grant to be bigger and hopes to help people in the lower valley on grant writing in the future.

Patrice Gapen noted that CSU will be hosting a grant writing workshop on August 21st and 22nd for a $350 admission.

Ms. Gapen briefly reviewed the scope of work with the Board and what would be covered and needed on a year to year basis.

General Manager Winner reviewed with the Board his expectations in partnership with CSU on marketing, water quality and grants.

Director Kennedy noted that they want to review the scope of work and contract and discuss it at the next Board meeting.

Director Esquibel asked for proof of work before the District enters into a partnership.

Patrice Gapen suggested setting up a meeting with General Manager Winner, Director Esquibel and herself on the marketing partnership.

PUBLIC COMMENT:
Dannie McMillan-City of Lamar suggested to the Board that they use previous information gathered on water quality.

Doris Morgan of Senator Allard's Office in Pueblo said that Senator Allard and Mr. Keyes will meet with the Technical people regarding the Conduit on Friday, May 13, 2005. She suggests the District write a letter to the Joint Committee on taxation of the importance of conservation easements in Southeastern Colorado.

ADJOURNED:
Chairman Singletary asked if there were any other matters to come before the Board. Hearing none, motion was made by Director Ridley, seconded by Director Esquibel to adjourn the meeting. Motion unanimously carried. Meeting was adjourned at 12:37 P.M.