MINUTES

The Board of Directors of Brooktrails Township Community Services District met in regular session on June 12, 2006 at 7:08 p.m. at the Brooktrails Community Center.

A. PLEDGE OF ALLEGIANCE

B. ROLL CALL
Roll call showed the following directors present: Williams, Ziady, and Skezas. Directors Orth and Horrick were absent. Also present were General Manager Chapman and District Counsel Neary. Director Horrick arrived at 7:13 p.m.

REPORT ON CLOSED SESSION
District Counsel Neary reported that the Board met on a matter of potential litigation, not capable of being ascertained at this time, and received advice from counsel and gave direction to counsel.

C. ADDITIONS/ADJUSTMENTS TO THE AGENDA
None.

D. MINUTES OF PREVIOUS MEETINGS
1. May 23, 2006. Director Ziady moved to approve the minutes as presented; Director Williams seconded and the motion carried unanimously.

E. SPECIAL PRESENTATION
None.

F. PUBLIC HEARING.
2. First Public Hearing on Proposed Rates & Fees for Fiscal Year 2006-2007. General Manager Chapman reviewed the previous public meetings where rates and fees were discussed. He stated that the District intended to drop the sewer rates by $2.00 because we are waiting to hear more from the City of Willits. For water, an increase of $2.80 was requested to the base rate. Tier charges have also been raised, and new Tiers 5 and 6 have been added. Some charges such as door hangers were being raised. Golf course fees were scheduled to rise.

President Skezas opened the public hearing at 7:12 p.m. Maria Bates took the podium and asked what the average water usage is for the City of Willits and the City of Ukiah for a family of four, the base line for conserved use versus regular use. Mr. Chapman responded that every water district was different based on their infrastructure size. He said he did know that average water use in Willits (which includes a lot more commercial accounts than what we have) is about twice as much per family compared to Brooktrails, based on information provided by Claudia Reed's recent newspaper article. Maria Bates said we are already conserving water and Mr. Chapman confirmed this, but also noted we also have a capacity issue. Ms. Bates said she was troubled; on the one hand we are trying to raise funds for infrastructure, but at the same time are trying to have more people hook up. Mr. Chapman said she could come into his office to discuss these questions any time.

Mr. Chapman noted that a letter of protest had been received from David Paland that afternoon at the District office. He reviewed some of the statements in the letter and noted some inaccuracies, in particular the assertion that sewer rates had to go through a Prop. 218 election, and quoted from a recent court decision confirming they are not subject to Prop. 218. District Counsel Neary said he believes Prop. 218 excludes water and sewer rates by its very provisions, and there is a case before the Supreme Court, involving Rancho Cucamonga CSD, where the court will have an opportunity to address this exemption. Under existing law, water and sewer rates are considered exempt from any application of Prop. 218.

Director Williams wanted staff's responding comments to the Paland letter (prepared by Joanne Cavallari) to be part of the record. President Skezas closed the public hearing at 7:24 p.m.

3. Public Hearing on Proposed Budget for Fiscal Year 2006-2007. General Manager Chapman commented that recent budgets have been very project-oriented and we were in the process of converting our rates into assets, such as the $1,000, 000+ project recently completed at the water plant. He reminded the directors that it was crucial to have all of the three available directors present for the next June meeting (June 27) or the processes would have to be started again.
President Skezas opened the public hearing at 7:26 p.m. There were no comments and the public hearing was closed at 7:27 p.m.

G. PUBLIC COMMENTS.
None.

H. CONSENT CALENDAR
3. Review of Accounts Payable report and authorization to issue checks. General Manager Chapman pointed out the paving in the Ohl Grove had been done, and Vogel Engineering was also being paid for the air survey of Lake Emily. Director Williams moved to authorize payment of the accounts payable; Director Ziady seconded and the motion carried unanimously.

I. ACTION AGENDA
4. Appeal of Spring Creek backflow device requirement and request for refund of related charges - Maria Bates. General Manager Chapman said that Maria Bates had come to his office and submitted the letter before the Board. He had written to her about the requirement on the District to protect its water system users which resulted in installation of 70 backflow devices to prevent contamination of the water supply. Spring Creek properties have the ability to obtain auxiliary water and therefore had backflow devices installed.

Maria Bates said she found out about the charge on May 5, 1994, and asked about it then and was told it was necessary. She said in her case she had no other water source or hot tub or pond and represented no threat to Brooktrails. She said in the case of Spring Creek the issue was "potential," and she was offended by the District's assumption that people in Spring Creek would develop a spring without the District's knowledge and choose to contaminate the District's water. She asked whether there was a backflow device on everyone in Brooktrails. Director Horrick said that there was more potential for this problem in Spring Creek. Ms. Bates asked why the District didn't worry about septic. District Counsel Neary said he was there in 1994 and he recalled that the justification for the backflow device installation and testing requirement was for all parcels that had the right to other sources of water, which included Spring Creek and some parcels in Brooktrails that were within the boundaries of the District, but not within the subdivision. Four or five such parcels have the legal right to develop their own water well on their property, and he understood that those parcels were also required to have backflow devices.

General Manager Chapman said these devices were inspected annually and the inspector had to be qualified. He informed that Homeland Security in the next few years may require every connection in the United States to have a device. If this happened the District would probably have to hire another employee. Ms. Bates said we were wasting money for these inspections on devices that were not necessary. Director Williams responded it may be a lot cheaper to inspect the devices than to inspect the properties to see if they contain a threatening water source. Director Ziady said when it comes to public health, sometimes we have to make rules that may seem kind of offensive, but it is our job to guard the water system for all who use it. Sometimes, she said, you and I have to pay something for the common good. Ms. Bates said she disagreed.

An audience member named Mike Johnson said he used to design water systems in subdivisions; he said you will find engineers who know the business saying that every connection should have a backflow prevention device. He said that a well-designed water system has a backflow device at every service.

Director Williams asked what the Board was authorized to do. President Skezas said we have to take action on her appeal. Director Williams asked if her appeal is granted, is it with respect to her property or to all properties. District Counsel Neary said under our ordinance if the Board makes a finding that the application of the requirement for installation and testing of a backflow device on Maria's parcel is unjust, you can grant relief. Generally, he said, the basis for relief was based on hardship rather than disagreement with District policies. When it comes to rates and charges, he said, you would be on a slippery slope to grant someone an exemption from a current charge just on constitutional grounds. But theoretically you have the right to grant it for a hardship. Director Ziady moved to deny the appeal. Director Horrick seconded, and said "without prejudice." The motion carried unanimously. President Skezas stated that the appeal was denied.

Director Williams said he had always felt that any cost should be borne by the widest possible sector. He said if the purpose was to protect the system against the possibility of contamination, the cost should be imposed on the system.

6. Consideration of Gitlin Subdivision Proposal. Dr. Rob Gitlin corrected the statement in his cover letter in that his use permit expires in 20 years, not 10 years as stated. An assistant handed out maps and other information on the subdivision to the directors. Richard Ruff of Ruff & Associates said that Dr. Gitlin came to them on his project, having been told by the Board "to dream" about what he could do on his site. He presented a PowerPoint series of drawings for potential buildings. He speculated there could be coffee shops, other retail, and stairs connecting these to other buildings. The existing lodge would be refurbished; there would be a health fitness center and a swimming pool; about 40 condominiums with parking under the units. Mr. Ruff said the trees in the drawings were conceptual; they would retain as many trees as they could, and provide a sidewalk along the road. Then, he said, there is a set of townhouses stepped into the slope, an upper and lower tier and in the center a green space, maybe for recreational uses and picnic areas. On the very high end would be 4-5 single-family houses. The concept was for a village. The sketches would go through many more renditions and be refined. He said tonight they were looking for a "will-serve letter" so they could take it to the various agencies, and assured the Board that they will take the District's input and ideas and incorporate them into the master plan. He said he forgot the amphitheater; they had decided not to do a full round, but just a half-round, to be connected with a plaza so there could be some small-scale public events. He said they had attempted to represent the slopes; the plan has some plateaus and shelves. He said he thought it was a great project; he commented they were going to have to win over some people, especially considering the water issues he was hearing tonight about hookups. He said they would like to move this on as quickly as they can and a will-serve letter was the next step.

Director Ziady asked if it would be time-share condos instead of lodging. Mr. Ruff said there was a possibility of time shares and also of lodging. He said they wanted to attract people to the area to go hiking or golfing. Director Ziady asked how many townhouses there were; Mr. Ruff said 31. Director Ziady asked how many water hookups they had presently. Dr. Gitlin said he had 21 residential hookups and a commercial hookup. Director Ziady said you don't have enough water to cover this project due to the moratorium. Dr. Gitlin said he would like to do the residential portion as a phased project, phased for what water is there. He would try to get a tentative map approval on that with the will-serve letter, when water was available in Brooktrails, that he would be in line for those hookups. Director Ziady asked if he would be expanding his use. Dr. Gitlin said he would be expanding from what he uses now, but historically, probably a little bit more than historical uses. He said that historically he had 20 residences on his commercial unit, and those have been subtracted. He said basically he was bringing a concept to see if this is something they wanted to see in this Township, and that if it is, we could work together. He said the WELL group in town had issues about peak oil and creating self-sustaining communities, and he had talked to Director Tony Orth at a WELL meeting. He said the project reached out toward the District center and creates a gathering place on a more ongoing basis with a health club, spa and swimming pool. He said the Lodge would become a restaurant.

Dr. Gitlin introduced Sam Pope as the engineer. Mr. Pope laid out a set of drawings before the Board. Dr. Gitlin said the commercial/retail space was where you could have a little coffee shop, video store, office space, so people wouldn't be driving into town for everything. Director Ziady asked what he would be charging for his townhouses. Dr. Gitlin said he wanted to make a lot of these affordable, and that they will be in the $300,000.00 or less range. He said there will be phasing of the development, with 800 - 900 SF 2-story units along the road, and the next row maybe 1,200 SF with a whole garage and parking space, and 3-story, and at the very highest level, 4 - 6 larger, high-end houses on larger lots. The condominiums he was looking at as for seniors, with an elevator, and those would be affordable as well.

Mr. Ruff said they had heard there was a grant to resurface the tennis courts across the street; he said if the money is not there, they would be interested in refurbishing those. Dr. Gitlin made a comment about the tennis courts being a future site for solar electricity. He said they really would like to tie in with the people on the Recreation Committee to help facilitate something. Dr. Gitlin said when he initially came here he was hesitant to dream big because of the moratorium, and he was rather put off when Director Orth had mentioned this, but now they were looking to really create something wonderful here.

General Manager Chapman asked, in a perfect world where connections were available, how long the project would take. Mr. Ruff said it would take two years before construction could begin. He said he did not know if Dr. Gitlin had the right to drill a well, but they could put another tank there and turn it over to the District, and add to the overall storage capacity. He said the first phase would take 3 to 3_ years to finish.

Dr. Gitlin said all he knew was that when he goes to the County, they say to come back and get a "will serve" letter, and last time when they did that with the minor use permit, when we had come to an agreement that he had the water meters -- he got the "will serve" letter. He said he knew it is not every day that this Board addresses a major subdivision, but there were historical uses there with the commercial meter that he would ask to get some allowances for as something he would be able to do right now. He said he had gotten a legal opinion that he had a vested right to whatever water capacity goes through the 2" commercial meter.
General Manager Chapman said we negotiated an agreement with Dr. Gitlin in 2002 and that he had 20 units; he later bought the post office and now that's how he came up with 21 units. Plus he has a commercial meter that took care of the lodge and the motel. What would obviously be available, Mr. Chapman said, were the 21 connections that he currently had. However, whether he expanded beyond that was a function of how fast we can extract ourselves out of the moratorium. He said we have a waiting list of 20, throwing out the idea that Dr. Gitlin would have to be placed on the list like everybody else. Mr. Chapman continued that if and when we get out of the moratorium, our connections are probably going to be somewhere between 3,000 and 3,500, but our Specific Plan speaks of somewhere around 4,000 dwellings. So it's strictly a Board decision as to where we would put Dr. Gitlin in this waiting list line. The other issue, he said, is sewer connections. Currently you have only one sewer line. This was one of the major concessions the Board made in 2002, but this would raise a question as to paying individual sewer connection charges, at least to the individual units--maybe something different to the commercial.

Director Williams asked what a "will serve" letter would do. Mr. Ruff described the conditional "will serve" letter they received for a 120-townhouse project in Lake County, and said a conditional letter is enough to get on to the tentative map process. District Counsel Neary said a will serve letter is really an outdated term, and what Dr. Gitlin is asking for is a will serve for 21 parcels. He further continued a major subdivision could require a water assessment survey under SB610, which would be an assessment by this District as to its ability to provide service for the anticipated project, and what are all the capital projects in line to accomplish that; this would be a fairly comprehensive project explaining what expansion projects are underway, how they are to be financed, etc. Then with that water survey assessment the County can phase the project and allow phased portions of the map to be recorded only when the District provides a certificate of current ability to provide service. He said it would seem if there was demolition of the existing structures, that would be the only thing it would be conditioned upon; you could issue a will serve letter conditioned upon that for 21 residential units and the commercial structure.

Director Williams asked for clarification as to which of the different proposed structures were to be on the commercial meter. Dr. Gitlin said everything on the left of the map would be [lodge, retail/office, health club, 40-unit hotel/fractional ownership building, 20-unit condominium]. Director Ziady questioned condominiums being sold for individual ownership on one commercial meter. Mr. Ruff said you have a homeowners association. He described the fractional ownership/time share process as well.

Director Williams said his concern was he could see you developing the commercial side of this to the point where you may have the right to water, but the water isn't there. He went on to say, the pipe can only deliver so much at a time and you need more water, or the pipe can deliver water, but we've got a water crisis up here and a commercial hookup to your property that's sucking the whole place dry. So, he said, I want to make sure that doesn't happen. It seemed to him that it could be 5 to 6 years before you could know whether or not the last piece of the water supply, raising Lake Emily, was ever going to happen. General Manager Chapman said we are going to be in the process for the next five years. He continued that next we're going to install the rubber spillway and gain another 3' capacity, then raise Ada Rose 2' temporarily; that would probably bring us close to 1,500 SFR's, but not necessarily take us out of the moratorium. Then we are going to raise Lake Ada Rose an undetermined amount, followed by raising Lake Emily 15'. Between the two large raises, we should easily have somewhere between 3,000 and 3,500 potential hookups. Director Ziady voiced it would also take a 218 election by the community at large. Director Williams commented it would be a very expensive process.

Director Ziady said she liked a lot of what Dr. Gitlin was bringing here but had some concerns. One was that we have a Specific Plan, and people want water to build, and if we give you all these hookups, does that mean we take water away from the lot owners? She felt this needed to be a public process with several public meetings with a facilitator and hearing from people with different views. She said she represented an entire District, including people who come here for single lots. If I put you in line for the moratorium, she asked, they will ask, when will I ever get to build if I have to be behind you? She said she felt she and the Board could work with him on his 21 hookups, but said you have to involve the entire township. She also had some concerns about settling past issues with sewer connections, and concerns about senior housing and a restaurant that didn't happen, and some assurance and guarantees that the commercial and other development will happen this time. She repeated her concern about what do you tell the people, when we don't have enough water, that they can't and never will build on their land, and said she had to balance her representation for the people who are standing in line waiting to develop.

Mr. Ruff said he didn't think they were proposing stepping ahead of anyone on the waiting list but are looking to get started for the planning process with a conditional will serve letter saying you can serve it as you become able to serve it. Director Ziady repeated her concern that if we have said we will serve this project, at some point somebody's not going to get water because there's not enough water. She said she could see giving Dr. Gitlin the 21. President Skezas said we needed more details. Director Ziady added that homeowners, to get a "will serve" letter, have to go through the whole architectural review process. She said to Dr. Gitlin, to say that you're above that process that I'm asking an individual to do before they get their will serve letter, I'm uncomfortable with, because I'm asking Joe Blow to go through all these hoops to get on this list because we have a moratorium. She would like to see more detail and architectural review, and said she can't ask this process of her constituents, and then approve this project on the basis of this computer-generated map alone. Dr. Gitlin responded that he was going through a more extreme review than Joe Blow, who goes into the district, fills out an application, gets a "will serve" and then goes to the County and submits their plans. Several directors spoke to clarify the actual approval procedure and to inform Dr. Gitlin that these applicants cannot actually build after approval, and that the same process applies to both residential and commercial projects.
President Skezas said at the last discussion, Dr. Gitlin had asked whether he would lose a water hookup if he demolished a house. President Skezas said that's a lot different than moving all of these houses down here. He said that the 21 hookups that Dr. Gitlin had gotten a few years ago were at an extreme bargain. He said moving the units from the 20-unit condo down here in his opinion were new hookups, and he was suggesting that Dr. Gitlin pay full price for each unit, not a reduced price. Dr. Gitlin said he was basically here for the Board to give him some kind of decision tonight. President Skezas said he didn't think they were going to do that, that he thought they needed a lot of discussion about how they were going to handle this.

Director Williams said they needed to discuss it with District Counsel. District Counsel Neary said what was being presented to you formally had a number of consequences to it, but there was probably something non-discretionary about it on the 21; he said he felt there was a danger if you made a final determination that was too little, or underneath any vested rights, and of course it would be overreaching to make any commitments over and above that. He suggested that they actually develop a will serve letter in light of what they'd heard tonight and present it to the Board for their approval. He felt the Board should have in front of them a will serve letter and be careful of making any commitments one way or the other. He said he felt we can present to you a will serve letter that will incorporate enough for Dr. Gitlin to commence his planning process to develop the kind of detail the Board is asking for, without making the kind of commitment that is an over-commitment or an under-commitment.

Director Williams asked Mr. Neary if someone has a house up here with a hookup, and they want to demolish it and build a new one, do they have to come back to us. Mr. Neary said they have to go through architectural review, and confirmed they don't lose their hookup. Director Williams said he's going to do a teardown and relocate those 21 residential units, he can have them and he can move them around on his 14 acres. Mr. Neary said architectural review it is a very site-specific process and somewhat subjective by the District Architect. President Skezas said in his example the meter would not move. Director Williams said it wouldn't matter if they moved it on the lot. He said Dr. Gitlin ought to be talking with the District Architect about the residential units; and he said anything Dr. Gitlin would get from the Board in the future is going to be within the four corners he's got now, that will be in place for at least the first two phases. He told Dr. Gitlin he has to make an economic decision without any certainty that he's going to get beyond what's currently there.

Dr. Gitlin said he wasn't looking to take 21 meters and move them to the other side of the property but to demolish and rebuild units and keep the meters on that side of the property. He asked what is the Board recognizing on those vested rights, and also he wanted to know whether the Board felt he should continue to work on this project, or go back to the previous plan, which would take the existing buildings, create lots with them, tear down the 20-unit motel and build a 20-unit condo. He said he went to a roundtable meeting at Planning and they really liked this current proposal. He said he wanted to be served as fair as anybody else and wasn't looking for any special favors. Directors Ziady said if we concentrate that much water usage in one area, then who do you say no to. Director Williams said what he needs to understand is that once he gets outside the box of the current water usage rights that he has, everything else is going to go into the same pot with everybody else. He said it would be his position that this would not be a single process for the entire 14 acres with one approval for the package; it won't work that way. But he thought that once the 21 are used, that the residential are going to be in with everyone else up here who has a lot and has to wait until the moratorium is lifted.

Director Ziady said she thought there should be a public hearing and input from the community, and referred to Hal Wagenet's proposed development in Willits which had public meetings. Mr. Wagenet spoke from the audience to say that his project was a Planned Development incorporating residential and commercial and that process requires an open dialogue with the public. Mr. Neary said we can't provide the process on that; the notion of a public hearing denotes some sort of quasi-judicial determination by this Board, when in fact all we're talking about is a will serve letter, which is a ministerial act at a certain point. He continued that certainly we could bring it before the Board and invite the public to comment. But, he said, we're being presented with a group of some formal and informal requests, and he felt it was very dangerous to respond to formal requests in a casual manner. Sometimes comments of an individual director might be blown out of proportion as being the position of the Board. He said we should come back with the actual document that you could issue under today's circumstances, and then we'll have to address some of the other issues. But he said he didn't think we should debate them here. Director Williams asked, given the Brown Act, when do we debate? Mr. Neary said any decision that you make must be made in a public setting, and any debate among a majority of the directors must be made in a public setting. Any time there is a motion there is going to be an opportunity for public comments, and this is the public hearing on any Board action. He said he would advise them not to take any action tonight, as he was now understanding the import of what the Board was being asked. He said there were some issues beyond that which he felt we needed to address in a formalistic manner. In fact, he said, he felt we should require Dr. Gitlin to actually present them in a formal manner, and said this dialogue back and forth was somewhat risky. He said the purpose for tonight was to determine what actually is being asked for, but he wouldn't debate the relative merits of the public project at this point as to fairness or unfairness, etc.

General Manager Chapman said we could have something back at the second July meeting. Dr. Gitlin said he needed to find out what they were willing to serve so he can look at his design. Director Williams said he assumed District Counsel Neary would talk to Dr. Gitlin about developing a will serve letter consistent with the District's responsibilities. District Counsel Neary said it is the policy that opinions have to come to the Board before release. He said he would be happy to talk to Richard Ruff in advance of the Board meeting to lay out a letter he would recommend that the Board issue. Beyond that there would be an opinion. Director Williams asked General Manager Chapman what the commercial connection Dr. Gitlin has commits the District to. Mr. Chapman said there was a higher commercial rate for whatever went through the meter. Mr. Neary said there was a legal question there and it would need to be a memo from him. Director Ziady said when Dr. Gitlin was here the first time, she believed they had requested staff to locate some guidelines on development projects within Brooktrails. Mr. Chapman also said is going to be a technical issues as to who is responsible past the street. There are six meters involved behind the street and we don't know who will be responsible if there is a leak.

An audience member said when she first moved here in 1977 there were the tennis courts and swimming pool, and it was lovely. She felt what Dr. Gitlin was proposing was an asset and would be publicly available, and she felt that the directors were adamant in opposing this. She thought the Board was closed-minded; she understood there was a water issue but said you have to look beyond that. She hoped this would be open to the community. Maria Bates then said the idea of a pool was wonderful. However, she said, she was quibbling about the District asking her to conserve 10% this summer, and said you're talking about this large scheme using water -- as long as you could pay for your commercial tap you could use as much water as you wanted. She said this didn't sound right, and said she was hearing that if you have money you can turn on as much as you want, but the rest of us are squeezed dry.

Mr. Ruff said there would be a lot of green aspects in the project; we are not here to waste energy or water. He said they would have solar hot water heaters and all kinds of measures to conserve water because we don't want to pay for it either. President Skezas concluded the agenda item and a brief break was taken.

7. Consideration of extended services by Jim Hanson (Hanson Engineering) for amendment of the 1982 water rights application. General Manager Chapman said that the proposed revision of the 1982 water rights permit would come to the Board the second meeting of July. The modification would probably come down to somewhere between 1,000 and 1,100 acre-feet, which would serve about 4,000 SFRs. This depended on how much water we could get from the raising of Lake Ada Rose (undetermined). Jim Hanson has provided an updated budget for this process, and the request to the Board was to approve an additional $20,000.00 for his work. This will primarily be for the CFII process down Outlet Creek. Director Williams moved to approve an additional $20,000.00 for services by Jim Hanson as requested; Director Horrick seconded and the motion carried unanimously.

8. Consideration of extended services by John Hanson (Hanson Engineering) for the preliminary engineering reports/blueprints of Lake Emily. General Manager Chapman reviewed the needed services and John Hanson's estimate that an additional $80,000 would be required for the preliminary engineering report. Mr. Chapman expressed frustration that the overall cost of the project is still yet unknown, yet we have an internal deadline of October 1, 2006 with USDA Rural Development. Director Williams asked if this $80,000.00 was something we didn't know about before. Mr. Chapman reviewed that we had budgeted $100,000.00 for this year and have spent about $75,000.00. In comparison, the engineering done by Oscar Larson for the Clearwell project was well beyond $100,000.00. He noted Mr. Hanson's apprehension about some of the berm issues with CA Division of Dams. Mr. Chapman said he is still trying to keep to his project milestones. Director Williams asked if we just have to accept the uncertainties out there and spend the money. Mr. Chapman said so many things come up, like we didn't even know we were going to be dealing with a berm until February of this year.
Director Ziady said her concern was that we are not getting hookup fees, so our capital money is not growing but just going down, and asked how much we can spend before reaching the point where we have to make some hard decisions on letting something go. Mr. Chapman said he had $616,000.00 cash flow that he can push, and right now we have $1,967,000.00 in total cash, but $1,166,000.00 of this was in the Sewer Department and unusable on water projects. He reiterated that if we don't keep pushing hard, it's just going to get more expensive. President Skezas voiced if we don't make the October 1 deadline, we'll be a year behind, and all the costs will escalate. Director Williams moved to approve the $80,000.00 additional funds; Director Ziady seconded and the motion carried unanimously.

9. Consideration of services of Mark Vogel, PE, to conduct survey of Lake Ada Rose at 2' raise and undefined potential raise. General Manager Chapman said this reservoir could be raised substantially higher than 10 feet, possibly taking it from 7 acres in size to 11-13 acres. Mark Vogel would need to do an aerial survey as soon as possible so we can learn how high we can raise it. This information is also needed for the water rights application revision. He anticipated that the new toe of the Lake Ada Rose dam would come down to Primrose Drive at the base of the hill. He said that the geologists suggested there are no significant geology problems, as compared to some potential problems at Lake Emily. We also have no issues of condemnation around the lake. This project would be done before raising Lake Emily 15'. Director Williams moved to approve a contract with Mark Vogel not to exceed $9,000.00 for the aerial survey of Lake Ada Rose; Director Ziady seconded and the motion carried unanimously.

10. Consideration of services of Wagner & Bonsignore Corp. for a water hydrology review of watershed flows. General Manager Chapman said that when he met with the Regional Chief for DHS in April, she stated that the range of dispersion figures for water availability study in the Herman report seemed very wide. He presented to the Board a proposal by Wagner & Bonsignore to do a peer review of the Herman report for a fee of $4,000.00. Additionally, if they found that a new availability study needed to be calculated, their quote for performing that was $10,000.00 - 15,000.00. This new water availability analysis [WAA] would include the data gathered by our USGS gauges over the past three years.

Director Ziady said that peer review was like closing the barn door after the horse was gone; if we were going to challenge the Herman report, that should have been done long ago, and she did not feel we have enough data collected to challenge it. Rich Estabrook said he did not feel much work would be done for $4,000.00, and he felt that the answer to whether the Herman report needed re-doing was certainly going to be yes. He said that in his understanding a WAA was done to determine whether a new storage facility would fill up and was a very rough, inaccurate analysis. The Herman model took the Outlet Creek data which covered 40+ years and used a known equation to scale that back to Willits Creek. They did a daily analysis of Outlet Creek in a very dry year. The purpose of the Herman report was to determine how many SFRs could be served by our existing storage, and this was very different from the more general WAA type of study. Mr. Estabrook said he believed the Herman model worked fairly well, and that the simulated creek flow responded to rainfall as we have observed with our USGS data. He said nothing led him to believe that there were huge errors in the Herman simulated creek flow data, although he acknowledged there was some uncertainty there and in the equation used to adjust for drainage. Uncertainty can go either way, he said, high or low. If you do another study, you might find less water.

He recommended, instead, if the District were going to spend $20,000.00, that it would be more prudent to have USGS reinstate the Outlet Creek gauge for a year or two, so we could correlate between Willits Creek and Outlet Creek (which stopped data collection about 1991). That would give us more certainty on the simulated creek flow. Again, he said, it might be more, or it might be less. He checked with USGS and was told that if they only have to deal with low flow in Outlet Creek, it would be cheaper than the usual cost.

General Manager Chapman said one of the things that came from the discussion with DHS was that if you're going to choose a model, typically Highway 101 is a dividing line between the wet side and the drier side. Mr. Estabrook believed some of that was considered in the Herman report. District Counsel Neary said he had probably prompted the idea of a review of the Herman report when he talked with Mr. Chapman about developing some additional data. The Herman model was based on the Outlet Creek station, put in in the 1950s and taken out in the 1990s. It was a gauging station much like ours. The Division of Water Rights wanted to measure Outlet Creek, so it was a sponsored gauging station. There were also questions as to whether it had been calibrated and it was confirmed that it had been. The Outlet Creek gauge, he said, was based upon a 150-square mile watershed. The Herman report (which, he added, was actually subcontracted by Tom Herman to Thomas Mannatt, PE, who has since left SHN) perhaps bears a second look because of the decision to use Outlet Creek rather than Elder Creek, which is a watershed near Branscomb at roughly the same elevation which equates to ours in rainfall and in watershed size, at about 6 square miles. The Elder Creek gauging station also has about 35 years of data, was calibrated and continues to function. USGS uses it for its own calculations. They have specified that it is analogous to Willits Creek watershed. Mr. Neary continued that we do have three years of local data. We can look at the two of them, and the answer may leap out from the page or be ambiguous. Mr. Neary said the Herman report did establish the amount of sedimentation, which is beyond question. But the one question about correlation of the watershed, which may be such a big variant, may save this District millions of dollars.

Director Ziady asked if we could take Mr. Estabrook's suggestion of monitoring Outlet Creek for a couple of years. Director Williams said we already have this one with a device on it [Elder Creek]. Mr. Estabrook said he would talk about this with USGS. He said while the Herman data may be high or low, it's not magnitudes of order high or low. He felt it might add or lose 100 SFRs, and before we spend $20,000.00, he would talk to USGS. Mr. Chapman said that one thing we do have to prepare is the water availability analysis. We're going to probably spend $20,000.00 to do this, whether with Jim Hanson or with Wagner & Bonsignore. Mr. Estabrook said that if Hanson does it, it will be for a very specific purpose. Mr. Chapman then advised President Skezas the WAA is a requirement of the state permit process, as is the CFII study. He clarified that Mr. Hanson had said that if the other firm did the WAA, he would use part of their data as part of his WAA filing report. President Skezas said he felt Mr. Estabrook's caution about using a WAA as peer review should be heeded. Mr. Estabrook said he would get the Elder Creek data and be able to give the Board a rough idea of what it would do for the District, although a final report would have to be prepared by a civil engineer. Discussion followed, including President Skezas' reminder to keep to the agenda item, which was the work proposed by Wagner & Bonsignore, and not Elder Creek.

Director Williams suggested going straight to the WAA report ($10,000.00 - $15,000.00), and skipping the peer review suggested for $4,000.00. Mr. Chapman said the problem was, if he had Hanson doing the WAA, he didn't think he could make the October deadline. Mr. Estabrook recommended doing the WAA if it were critical to the timeline. Mr. Chapman said originally the WAA was proposed by Hanson, but then he had made contact with Paula Whealen (Wagner & Bonsignore) through Chris Neary, and they had come back saying they also prepared WAA studies. In fact, their entire specialty was strictly water works projects.

Directors reviewed the letters in the staff report. President Skezas said the letter wasn't clear about the additional amount Wagner & Bonsignore would charge, or the separation between a peer review and a WAA. Director Ziady said during that time we could have Mr. Estabrook look at the other data. President Skezas asked if we could make a motion to conditionally approve this request based on other data. Mr. Chapman said Hanson had already said he would charge approximately $20,000.00 as a baseline; but if he could get $20,000.00 for Wagner & Bonsignore to do the WAA, that would speed him up by a month. Director Williams so moved. Director Ziady seconded the motion on the floor. Director Williams repeated his motion, that it would be to approve hiring Wagner & Bonsignore for $20,000.00 to do the WAA. President Skezas asked if we had to make a determination of sole source based on the amount of the contract. Mr. Neary said this was for engineering, professional services. The motion carried unanimously.

J. ADDITIONS TO FUTURE AGENDAS
None.

K. SPECIAL REPORTS
From Directors: None.
From District Counsel: None.
From General Manager: General Manager Chapman reported a check was received that day from FEMA for $24,000.00. We put in a $15,000.00 pressure reducing station in Spring Creek and knocked the pressure down from 190 lbs. to 95 lbs., which was very significant.

L. PUBLIC COMMENTS
None.

M. ADJOURNMENT
Director Horrick moved to adjourn, and President Skezas declared the meeting of June 12, 2006 closed at 9:49 p.m.

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GEORGE SKEZAS, President
ATTEST:

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MICHAEL V. CHAPMAN
Secretary to the Board of Directors