MINUTES

• January 13, 2004

2. REVIEW OF ACCOUNTS PAYABLE REPORT AND AUTHORIZATION TO ISSUE CHECKS

3. REVIEW AND FILE ANNUAL REPORT OF OFFICER AND EMPLOYEE EXPENSE REIMBURSEMENT

4. GOLF PROPOSAL DISCUSSION, RON RUNBERG, PGA

Director Pohlson left the table because of a conflict of interest since her husband, Doug Pohlson, is employed by the District as Assistant Parks Superintendent. General Manager Chapman reviewed the golf proposal paragraph by paragraph. Mr. Ron Runberg responded to questions and comments from the Directors about specific revisions.

Regarding the 6-year term of the contract, Mr. Chapman advised that this comports with Mr. Runberg's current contract.

Regarding Paragraph 4 of the proposal, Mr. Chapman expressed his concern regarding the change in the maintenance cap, per incident, from $2,000 to $500. He stated that repairs over $500, while unpredictable, could happen on a golf course and gave as an example pumphouse electronics, an item which would be very expensive and most likely show little advance warning of breakdown. President Orth suggested a side agreement on electronics so that an attempt could be made to forecast and budget them. At one point Mr. Runberg also clarified that the cap would apply to vandalism repairs. Mr. Chapman asked the Board if they were comfortable with the $500 figure and received a general consensus indicating "yes," they were.

On another item President Orth suggested that the golf course mats be rotated so they will not be due for replacement at the same time. Mr. Runberg advised that since most players play only 9 holes, the 9 mats which are less used could be worked in as spares.

In Paragraph 6, Mr. Chapman suggested that Mr. Runberg's employment status was that of an independent contractor, and therefore he would not be eligible for Workers' Compensation.

In Paragraph 9, Mr. Runberg said he would pay for cable TV in the Pro Shop.

In Paragraph 12, the figure for water was established at 17,000gal./day.

In Paragraph 15 regarding the language, "The parties shall agree in advance," Mr. Chapman clarified that if the District were to get involved in a project with Mr. Runberg, the two parties would be looking at it in advance during the budgeting process.

Regarding Paragraph 16, Mr. Chapman clarified that the District will maintain full responsibility for setting green fees.

President Orth advised Mr. Chapman that the Board wanted an estimate to be prepared on anticipated savings between the Golf Course's current method of operation versus the proposed agreement. He requested that Mr. Chapman prepare the report in a very simple manner, to be easily understood by the public.

Director Ziady stated that at the joint Golf Greens Committee // Recreation Greenbelt Committee meeting which reviewed the proposal, it was suggested that a provision for future profit-sharing be worked into the contract. Mr. Runberg stated that, at least during the first two years, he would probably be absorbing income losses. Director Ziady then confirmed that the profit-sharing would come into play at a later point, once Mr. Runberg's income met a certain level, and was being requested because of the District's long-term subsidizing of the Golf Course. Further discussion resulted in a stipulation that in year 4 of the contract a profit-sharing review would take place for years 5 and 6.

Director Skezas stated that he would like to see Mr. Runberg propose the green fees.

The Board took no action on the overall matter at this time, and solicited public comment.

Bob Turner took the podium and stated that he felt that the General Manager, Mr. Runberg and Mr. Neary may be developing a contract in privacy and (except for the committee meetings referred to) without legal or public input. He asked Mr. Neary if these kinds of sessions in building a contract were to the community's advantage or some self-serving interest. He stated that, in the business world, you would wait for bids, and stated he felt the General Manager might have unusually strong input in this situation.

President Orth responded that this is a renegotiation of an existing agreement. Mr. Neary commented that the matter was brought to the Board as a generalized policy issue and in that regard, once the policy was approved by the Board, the next step would be to develop the terms and structure of the contract, and that he would prefer to prepare the contract to make sure it complies with policy direction. He stated that legal issues may be raised as drafting of the contract proceeds. President Orth referred to the employee/contractor/workers' compensation question as such a legal issue. President Orth also stated that for the District's protection, the Board would want oversight of certain matters, such as the filing of required documents by Mr. Runberg, written into the contract, and stated that he felt the Board was now ready to turn the matter over to legal staff.

Mr. Chapman stated that the golf proposal began in November 2003, and there have been four meetings under the Brown Act . Mr. Turner asked for clarification of Mr. Neary's relationship with the Board, the District and the Brooktrails community. President Orth clarified that Mr. Neary is under the direction of the Board and staff if legal questions arise. Issues and questions may also arise at Board meetings and be referred to the attorney. Individual members of the Board do not use the staff attorney for individual purposes. Mr. Turner stated his concerns were more with who has input to the attorney. President Orth reminded Mr. Turner that he can write the General Manager with questions of the nature that would end up in Mr. Neary's hands, and stated again that the Board does want to see a fiscal estimate for comparative purposes.

Discussion and comment having ended, Director Pohlson returned to the table at 7:46 p.m.

5. APPOINTMENT TO THE BROOKTRAILS SPECIFIC PLAN ADVISORY COMMITTEE

Director Skezas moved to appoint Bob Terry to the Specific Plan Advisory Committee. The motion was seconded by Director Pohlson and passed unanimously.