SPECIAL MINUTES

1. REVIEW OF PROPOSALS FOR ENGINEERING OF WELLS

General Manager Chapman reported that he had sent letters to six engineering firms, but only two had provided bids. The variation between the two was due to the interpretation of the request for proposal, which was to provide a preliminary engineering report regarding the development of wells. The proposal from Tom Herman looked at locations along the stream to develop a well for irrigation of the golf course, while the proposal from John Phillips was much wider in scope, taking more geological information into consideration.
General Manager Chapman commented that he had estimated $25,000 in the budget to cover the study.
President Skezas spoke in favor of Mr. Phillips' proposal, which would analyze the entire District and ascertain the best place to start.

In response to concerns raised by Finance Committee member, Chuck Harden, General Manager Chapman summarized Mr. Phillip's proposal, and outlined the District's goals, the short range goal being the development of wells within twelve months. He offered to pursue other bids, but voiced concern about delaying the process.
Director Horrick commented on Mr. Phillips' proven track record, and made a motion to authorize the General Manager to proceed with John Phillips for an hydro-geologic evaluation. The motion was seconded by Director Pohlson, and the vote was taken as follows:

AYES: Directors: Skezas, Pohlson, Horrick
NOES: Directors: None
ABSENT Directors: Orth, Venturi
Motion Carried

2. CONTINUED REVIEW OF THE PROPOSED FISCAL YEAR 2003/2004 BUDGET

Utilizing the overhead projector, General Manager Chapman began with page 5 of the budget, which indicated proposed transfers from the General Fund to the Fire Fund and the Golf Fund to bring the fund balances back to zero. He stated his intention to pay off approximately $23,000 owed to the Water Fund from the Golf, Fire, and General Funds.

He pointed out that both Fire and Golf are operating at a loss, necessitating the General Fund transfers. Mr. Jack voiced concern about transferring two years of Fire Department deficit in one budget, pointing out that the public may not understand that the department is not paying for itself, which is why the fire tax needs to pass. He was also concerned about retaining General Fund money for unforseen needs.

President Skezas pointed out that the next year's expected loss was $29,000. After a brief discussion, it was agreed $29,000 would be transferred from the General Fund to the Fire Fund, as opposed to the $53,300 as proposed, leaving the fund balance as a deficit of approximately $24,000.

General Manager Chapman briefly reviewed the Personnel Summary and Expense breakdown on pages 11 and 12, and the projected revenues on page 9. General Manager Chapman pointed out the decrease in his hours allocated to the Fire Department As to the major projects listed on page 10, Mr. Jack asked that a column be added to indicate the expected date of each project. General Manager Chapman outlined the changes resulting from the new FASB34 requirements, noting that an additional outside accountant would have to be retained to assist with the conversion.

Mr. Brown reported that a recent conversation with Gene Calvert at the County Department of Transportation indicated that the second access was not in the County's current budget. Therefore, item 10, $15,000 for the second access road, was removed from the list on page 10.

General Manager Chapman next reviewed the breakdown of expenditures and revenues by fund. With regards to the Water Enterprise Fund, he noted that the $35,000 allocated to Contract Services/Engineering included the studies for wells and dredging. Mr. Jack pointed out that a portion of the contract authorized for wells would be paid prior to the end of the current fiscal year. General Manager Chapman commented that he would revise the forecast amount of $60,000 accordingly.

Backing up to page 4, President Skezas suggested increasing the higher water usage tier rates to give the DHS the message that the District is interested in promoting water conservation. After a brief discussion it was agreed that tiers one and two would remain the same, tier three would increase from .029 to .034, tier four would increase from .037 to .044, and the construction usage rate would increase from .063 to .064.

Moving on to the Sewer Enterprise Fund, General Manager Chapman explained that he had attended a budget meeting the previous day at City Hall. He reviewed the anticipated changes in City of Willits' budget for the current fiscal year, noting that the City of Willits was still opting for the "preferred alternative" (wetlands treatment marsh system in conjunction with facultative oxidation ponds). However, the cost had risen from $5.5 million last year to an estimated $9.5 million this year (FY budget 2003-2004). General Manager Chapman further explained that the District's debt portion (37.69%) would amount to $181,000 for FY 2003-2004. Additionally, the City of Willits was estimating a $100,000 upgrade to the sewer plant's mechanical clarifier next year. Brooktrails' portion will amount to an anticipated $37,700. In closing, General Manager Chapman revised next year's sewer budget to $389,000, up from the current $262,000 this year, and announced the expected rate increase from $17.57 per month to $28.43 per month next fiscal year.

The Board and committee members reviewed Government Code § 54984, the Uniform Standby Charge Procedures Act, and discussed the allowable use of standby fees and availability charges.