RECORD OF PROCEEDINGS MINUTES OF THE BOARD OF DIRECTORS OF THE ARAPAHOE COUNTY WATER AND WASTEWATER AUTHORITY. HELD: October 11,2017

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1 RECORD OF PROCEEDINGS MINUTES OF THE BOARD OF DIRECTORS OF THE ARAPAHOE COUNTY WATER AND WASTEWATER AUTHORITY ATTENDANCE: HELD: October 11, E. Caley Ave. Centennial, CO Present were Directors: Ken Beard, Doyle Tinkey, Geri Santos-Rach, Tom Wood, and Jeff Baker. Director Cromer was absent and excused. Directors Sharpe and Gardner were absent, and not excused. Also in attendance were Steve Witter, Kate McRae, Kevin McBrien, Martin Stegmiller, Emily Lowell, Patty Pratt, Daniela Soare, Rhonda Ruiter, Jeff Tyus, Nolan Cunningham, Jacob Bakes, Doug Gibbs, Joe Gardner, Chet Palmer, Bill Mercer, and Legal Counsel, Rick Kron and Ron Fano. Guests in attendance were Alan Leak, Respec; Pat Mulhern on behalf of Cottonwood Water and Sanitation District; Kaitlyn Minich, Colorado Department of Public Health and Environment (CDPHE); Michael Vickers, Compark 470; and Chris Sanchez, Bishop-Brogden Associates. CALL TO ORDER: Director Beard called the meeting to order at 9:00 a.m. in the Arapahoe Conference Room of the Arapahoe County Water and Wastewater Authority (ACWWA) office at E. Caley Ave., Centennial, CO Director Santos-Rach led the Pledge of Allegiance. ADOPTION OF THE AGENDA: Director Baker made a motion to Adopt the Agenda as presented. The motion was seconded by Director Tinkey and passed 5 to 0. PUBLIC FORUM No one came forward to address the Board. CONSENT AGENDA: Page 1 of 6 Director Wood moved to approve the Consent Agenda as presented and Director Baker seconded the motion, which passed 5 to 0. The Consent Agenda consisted of the following:

2 1. Request for Approval of Minutes of the Board of Directors of the Arapahoe County Water and Wastewater Authority - from September 13, Request for Approval of Payment Register 3. Request for Ratification of New Cache Catlin Agreement 4. Request for Approval Regarding Memorandum of Understanding Between Arapahoe County Water and Wastewater Authority and The Town of Parker 5. Request for Approval of ktent to Move Forward with the ECCV Northern Project Expansion Project GENERAL BUSINESS ACTION ITEMS ITEM No. 6 Presentation from CDPHE Awarding ACWWA the Gold Tier of the Pursuing Excellence Program Ms. Minich of the Water Quality Control Division of CDPHE presented ACWWA with the Award of Gold Tier of the Pursuing Excellence Program, stating that ACWWA has gone above and beyond regulatory compliance to optimize performance, making ACWWA a leader in the drinking water industry. Jeff Tyus and the Water Operations staff accepted the award. The Board congratulated staff on ajob well done and asked staff to prepare a press release regarding this award. item No. 7 Discussion and Possible Action Regarding the Draft 2018 Annual Budget Ms. McRae gave a presentation regarding the Draft 2018 Annual Budget including the schedule, process, status, material inputs and budget components. Mr. Witter then reported that ACWWA s health insurance company CEBT needs a benefits renewal commitment from ACWWA. This renewal commitment is needed before ACWWA s budget will be finalized and approved. Director Beard then moved to give the General Manager the authority to extend a benefits renewal commitment for 2018 with CEBT. The motion was seconded by Director Wood and passed 5 to 0. Director Wood then made a motion to set a public hearing on November 8, 2017 to discuss the proposed rates and fees for The motion was seconded by Director Baker and passed 5 too. The Board then directed staff to design a method of keeping the projections for repair and maintenance separate to ensure ACWWA s reserves are adequate to cover expenses at all times, including an asset management plan for existing equipment. ITEM No. 8 Discussion and Possible Action Regarding Water Service to the 17-Mile House Property Page 2 of 6 Mr. McBrien reported that since the 17-Mile House property is in ACWWA s service area, an intergovernmental agreement (IGA) with the City of Aurora for water and sewer service will be necessary. This project is being undertaken in conjunction with the

3 development of the Kings Point Residential Subdivision, which will be served by Aurora. The water and sewer project for connection to the Aurora water distribution and wastewater collection system will be funded by Arapahoe County. The Board directed staff to review the previous IGA with Aurora regarding shared capacity and compensation for the interceptor. Director Baker then moved to authorize staff to develop an IGA with the City of Aurora, allowing them to provide water and sewer services for the 17-Mile House property. The motion was seconded by Director Beard and passed 5 to 0. ITEM No. 9 Discussion and Possible Action Regarding a Resolution for the Filing of New Water Rights to Assist in the Operations of the ACWWA Flow Project Ms. Lowell reported that the water rights filing as requested by ACWWA s water adjudication attorneys are conditional water rights storage in Barr Lake in order to satisfy ACWWA s demand at full build out, per the ACWWA Flow Project. The PWRCP Committee has not had a chance to review the Resolution because the need was just realized late last week, after the PWRCP meeting. A brief discussion took place. Director Wood then moved to approve Resolution No of Arapahoe County Water and Wastewater Authority. The motion was seconded by Director Tiitkey and passed 5 to 0. ITEM No. 10 Discussion and Presentation Regarding a Request for a Change in the Terms of an Agreement Between ACWWA and Compark Business Campus Metropolitan District Mr. Kron disclosed that he currently represents both ACWWA and Compark Business Campus Metropolitan District (CBCMD) and would not be available for advice or comment on this matter. Mr. Leak then gave a brief history of the agreement which was entered into in 2011, giving (CBCMD), 100 Water Resources Credits that could be used on the planned Compark 470 Development, which at the time was intended to be served by ACWWA. The area will now be served by another water provider and Mr. Vickers on behalf of (CBCMD) is seeking permission to reduce the fee credit by 20% and to convey nontributary water rights to ACWWA at no cost. Additionally, Mr. Vickers would like to modify the agreement to allow the remaining credits to be used on specific parcels outside ACWWA s current service area. Mr. Leak shared staffs opinion in the matter. Extensive discussion took place. Mr. Vickers addressed the Board to share his reasoning on why he wanted the modification to the agreement. Mr. Chris Sanchez, a consultant for Mr. Vickers addressed the Board regarding how the non-tributary water rights assets mentioned could be dedicated to an augmentation plan. The PWRCP Committee recommends moving forward with trying to develop a modified agreement. Director Beard then moved to direct staff to pursue an agreement with CBCMD for future Board approval in line with the proposal described in the DBR. The motion was seconded by Director Wood and passed 4 to 1, with Director Tinkey voting no. Mr. Mulhern then addressed the Board regarding the potential economic benefit to Cottonwood Water and Sanitation District if they were allowed to serve the properties discussed previously Page 3 of 6

4 item No. 11 Discussion and Possible Action Regarding Chambers Reservoir Settlement Negotiations Mr. Witter gave a brief update. The Board in consensus indicated that Legal Counsel s proposed path forward as set out in the Executive Session materials that were previously delivered to them was the direction ACWWA should take. INFORMATION ITEMS AND REPORTS ITEM No. 12 General Manager s Report to the Board of Directors Mr. Witter reported that during this year s annual lead and copper sampling, as required CDPHE, no exceedances were reported out of the thirty samples taken, thus no further action is necessary this year. Staff is currently working with the Arapahoe County Attorney s office to develop an IGA regarding the continued operation and maintenance of the Arapahoe County Justice Center Pre-Treatment Facility. Staff has recently conducted four tours of the Lone Tree Creek Water Reuse Facility. Per the Board s direction, staff worked with Woodsprings Suites regarding the requested variance of tap size and payment of the tap fee. Mr. Witter reported that the water rights adjudication of the New Cache la Poudre Ditch shares change case has been successfully settled prior to going to trial and the final stipulation is expected to be received today. The 2017 enhanced water main cleaning (ice pigging) is currently underway and is focused primarily on commercial properties with much of the work being performed during the off hours, between 3 am and 7 am. Mr. Witter encouraged the Board to view the time-lapsed video of the replacement of the liner of the Lone Tree Creek Water Reuse Facility Emergency Pond, which has been placed on ACWWA s web page. ITEM No. 13 Committee Updates No report necessary at this time. ITEM No. 14 Staff Updates Page 4 of 6 A. JWPP Reconversion Project Update Mr. McBrien gave a brief update regarding the existing reverse osmosis (RO) membranes and the condition of the PALL MicroFitration (MF) system. Mr. Mulhern then addressed the Board regarding the most recent failure of the tests of the revised treatment system including the

5 biological reactor. The failure of the proposed treatment system will require a review and reconsideration of the proposed treatment process. The original proposed RO reconversion and Biological Treatment System 60% cost estimate doubled the cost of the proposed process from the original $5.3M to $lo.7m, and is now too expensive. Staff from both CWSD and ACWWA are exploring other ways to improve water quality at a lesser cost. Mr. Mulhern indicated that a suggestion was made at the most recent PWRCP meeting that the CWSD and ACWWA boards get together to discuss the path forward and he will make that proposal to CWSD at their next board meeting. B. Development Report Mr. McBrien reported that ACWWA currently has sold 174 tap equivalents or 72% of the projected goal for The Board asked staff to include a projected date of when those taps which are under review are expected to be finalized. Staff cautioned that this request will be very difficult to predict and will only be an estimate. C. Monthly Financial Statements Ms. McRae gave a brief review of the report that was provided in the Board packet. D. Legal Report -. Mr. Kron reported that the lien was released on the Lavenhar property as it has been sold. Mr. Fano reported that a Case Management Conference was held last week in the Valley Country Club legal matter. The Motion for Summary Judgment is still pending and the ruling is not expected until January item No. 16 Informational Updates A. Water Informational Dashboard The Board asked a question regarding the pumping numbers and Ms. Lowell explained that a miss-referenced cell was causing the wrong number to be shown on the graph, which will be corrected next month. B. Customer Service and Website Activity No report necessary at this time. C. Financial Report i. Investments No report necessary at this time. ii. Billing Activities The Board questioned the delinquent account listed under accounts receivable that has been reported. Ms. McRae indicated that staff will trend the receivables beginning in November. Director Baker reported that the Arapahoe County Board of County Commissioners (BOCC) has recently received five applications for people interested in filling the vacant positions on ACWWA s Board. Director Baker will be in contact with Mr. Witter regarding review of the applications and potential interviews. ADJOURNMENT At 10:49 p.m. Director Tinkey made a motion to adjourn the meeting. The motion was seconded by Director Beard and passed 5 to 0. Approved: Page 5 of 6

6 ARAPAHOE COUNTY WATER AND WASTEWATER AUTHORITY A~, Ken Bea/d, ~Th President Geri Santos-Rach, Secretary Page 6 of 6