October 8, 2003 Minutes-Board Meeting

A meeting of the Lower Arkansas Valley Water Conservancy District Board of Directors
was held on Wednesday, October 8, 2003 at 10:00 A.M., at 801 Swink Avenue, Rocky Ford, Colorado.

After roll call, President Mauch announced a quorum was present.

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

DISTRICT STAFF:
Julie Scaplo-General Manager
Bart Mendenhall-Attorney
Kim Chavez-Administrative Assistant/Financial Officer

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

VISITORS PRESENT:
Anthony Mestas, Pueblo Chieftain; Rodney Baird, La Junta Tribune Democrat; Virgil Cochran, Lamar Daily News; Michael Gates, Rocky Ford Daily Gazette; Dr. Mike Bartolo, CSU Extension; Phil Reynolds, SECWCD; N.E. Dorenkamp, Rancher; Doug & Madeline Chambers, Shareholders; Vernon L. Dillon, Realtor; John Knapp, USDA NRCS; Dave Reyher, Colorado East Bank & Trust Lamar; Ricky Markus, Rancher/Farmer; John Stroh, Appraiser.

APPROVAL OF MINUTES:
President Mauch asked if the Board members had reviewed the minutes for the September 10, 2003 Board Meeting and September 3, 2003 Acquisition Committee Meeting. Director Mauch asked whether there were any corrections or additions to the minutes. Hearing none, Director Wayne Whittaker moved for approval of the September 10 and September 3, 2003 minutes, seconded by Director Loretta Kennedy. Motion unanimously carried.

PRESIDENT'S REPORT: Mr. Mauch reported on his visit to Salt Lake and Ogden, Utah for viewing irrigation and secondary systems. The method used started approximately 15 years ago. They purchased ditch rights and installed the secondary system. They use the secondary line for outside use, which has cut their potable water usage in half. Therefore, they can build twice as many houses on the same amount of water. This method has been working in the Utah area and President Mauch believes the same method could be utilized in the Lower Arkansas

TREASURER'S REPORT:

• Treasurer Pete Moore reported that the financial report for the month of September was included in the Board's Monthly Meeting Packet. He reported September total revenues at $54,787.47 with expenditures totaling $33,243.05. Ollie Ridley moved to accept the Financial Statement and draft budget, seconded by Wayne Whittaker. Motion unanimously carried.
• Treasurer Moore reported that preliminary proposed budget was submitted to the Board for review by the due date of October 15, 2003. December 10,2003, the assessors' changes in assessed valuation will be made only once by a single notification (re-certification) to the county commissioners or other body authorized by law to levy property tax, and to the Division of Local Government. (C.R.S. 39-1-111(5)).

  December 15, 2003 is the deadline for certification of mill levy to county commissioners (C.R.S. 39-5128(1)). Local Government levying property tax must adopt their budgets before certifying the levy to the county.

LEGAL COMMITTEE REPORT: None

PERSONNEL COMMITTEE REPORT:
None

AGENCY LIAISON:
Director Kennedy reported the Arkansas River Water Preservation Committee Goals and Principles Document were signed September 26, 2003 at 5:00 pm at the Pueblo Convention Center. The principles have been jointly created by several entities within the valley. Each signer received a commemorative pen. This is a milestone for water preservation by bringing all the entities together and agreeing on a set of principles.

ACQUSITION COMMITTEE:
John Singletary reported that the Acquisition Committee met on October 1, 2003, at 1:00 P.M. to review possible water and land deals. Director Singletary is proud to have Mr. Norman Dorenkamp, Mr., and Mrs. Doug Chambers here today. Director Singletary presented a check for 100 LAWMA water shares at $2,250 per share to Mr. Dorenkamp. Mr. Singletary also presented a check to Madeline and Doug Chambers for 50 share of Fort Lyon water at $1,000 per share. Singletary thanks the Chambers and Mr. Dorenkamp.

GENERAL MANAGER'S REPORT:
Julie Scaplo gave an overview of the following items:

• Conservation Easement Policy: The General Manager reviewed the Draft Conservation Easement Policy. Comments were heard regarding amendments to the policy. It is the recommendation of Director Singletary to accept the policy with the changes heard. Action given to Julie Scaplo and Bart Mendenhall to revise the Policy. Seconded by Loretta Kennedy, unanimously carried. The approved amended policy will be available at the District office.
• Upcoming Events: General Manger gave a brief summary of the coming events. If any Board Member would like to attend these events, please contact the District office.

LEGAL REPORT:
Attorney Bart Mendenhall reports:

• Mr. Mendenhall has filed on behalf of the District a statement of opposition on the independent applicants for the Southern High Plains Ground Water Management District Association. Mr. Mendenhall would anticipate a motion to consolidate with the other cases.
• The motion filed by High Plain A & M / Fort Lyon case has been consolidated for the 2002 and 2003 cases. Southeastern Colorado Water Conservancy District has asked for limited written discovery having to do with a specific part of their application. The District will have to wait for the ruling from Judge Maes.
• We have been actively working on water acquisition and Conservation Easements.

OLD BUSINESS:
The following issues were discussed:

• Mr. John Stroh reviewed the IRS private letter that the District was discussing with the Conservation Easement Policy. It is Mr. Stroh's view that it is unnecessary and it does not contribute to the process. The only item the IRS is likely to question is the values and the value is dependent on the appraiser. The only two people who sign the IRS form are the donor and the appraiser. Mr. Stroh carries insurances for 3 million dollars to cover this situation. He thinks having a letter of interpretation from the IRS is not needed and does not fulfill a purpose. He wanted to explain to the Board a private letter from the IRS is not needed. Mr. Stroh explained that if an appraiser does not have the proper insurance or general certified license to do conservation appraisal, the appraiser would not be qualified to do conservation easements. It requires a general certified license to do conservation easements and anybody who practices without the proper insurance is foolish. It is standard procedure.

NEW BUSINESS:

• Speaker John Knapp with NRCS gave a report reviewing USDA Conservation Easements. The first program is the Conservation Reserve Program, which conserves native rangeland that has value. The second program is also a Conservation Reserve Program, which is a land rental program. This program brings cropland into reserve in native grass. The third is the farmland protection program, which is in place to preserve other types of agricultural land. Another program active in the area would be the wetland program after the flooding in 1999 this was established. People affected by the flood would place easements on their land, which was flooded cropland.
• Director Singletary would like the Board to think about receiving grants in the future.

PUBLIC FORUM:
President Mauch asked if there were any other questions or matters to come before the Board, hearing none. President Mauch said a request had been made for the Board to enter into Executive Session for the purposes of:

C.R.S 24-6-402(4) (a): "Concerning the purchase, acquisition, lease, transfer, or sale of any real, personal, or other property interest."
C.R.S 24-6-402(4)(b): "Conferences with an attorney for the purpose of receiving legal advice on specific legal issues."
C.R.S 24-6-402(4)(e): "Determining positions relative to matters that may be subject to negotiations; developing strategy for negotiations; and instructing negotiators."

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

• Board Members
• General Manager
• Counsel for the District
• Administrative Assistant

Director Wayne Whittaker moved that the Board convene into Executive Session, seconded by Ollie Ridley. Motion unanimously carried.

President Mauch recessed the District meeting to convene the Executive Session at 1:10 P.M. He adjourned the Executive Session at 2:11 P.M, and reconvened the District Meeting.

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

• Acquisition property interest
• Matters concerning legal advice
• Matters that may be subject to negotiations

A motion was made by Melissa Esquibel to authorize Julie Scaplo and Wayne Whittaker to negotiate with Community Banks of Southern Colorado regarding office space leasing. Seconded by Loretta Kennedy. Motion unanimously carried.

It is the interest of the Board to continue further discussion with CWPDA regarding a partnership with the District Office.

A motion was made by Loretta Kennedy to authorize Julie Scaplo continue to negotiate with Twin Lake shareholders for purchase and lease of water shares. Seconded by John Singletary to approve negotiations. Motion unanimously carried.

Direction was given to General Manager Julie Scaplo regarding Janet Hijar and her Colorado Canal/Lake Meredith water shares. There will be a 10% hold back until re-vegetation is deemed complete. Water is to be used for re-vegetation for up to five years cost of re-vegetation will be up to the seller.

ADJOURNED:
President Mauch asked if there were any other questions or other matters to come before the Board. Hearing none, the meeting was adjourned at 2:15 P.M.