1. Call to Order

The regular meeting of the Board of Directors of Bartonville Water Supply Corporation was called to order by President Graves at 7:10 P.M. on Thursday, December 9, 1999 at the corporation office.

Directors in Attendance

Joe Graves, President
Scott Kilpatrick, Vice-President
Larry Kaufman, Secretary-Treasurer
Kevin Alberts
William Warholy

Directors Absent

Michael Paulson

Consultants in Attendance

Jennifer L. Drury, CPA
Wayne Ginn, PE, The Ginn Corporation
Ronnie Phillips, Esquire

Staff in Attendance

Jim Leggieri, General Manager
Betty Robertson, Administrator

Public in Attendance

Frank Babb, Project Manager, Huitt-Zollars
Ocie Vest. PE, Huitt-Zollars
Mark Wagner, Partner, Republic Property Group

7. Discussion and Action on All Matters Related to Development of the Rayzor Ranch Including Approval of a Water Service Agreement Between BWSC and DCDD#4.

In his presentation to the Board, Wagner stated that the development group wanted to assure the Board that the initial and current goal is still to try and work out an agreement and that the group has no other goals in mind. He also noted that every- thing started out well in the beginning; however, he stated that things got off track partly because their counsel may have lacked knowledge that would have been helpful. He said the group has now changed counsel. He remarked that the group understood that all the changes and requests that were made in the agreement were legal and if they were not the group would do everything to rectify them. He reported that Phillips and their new attorney, Tom Leonard, would be meeting with lawyers for the UTRWD to get to the issues and determine what is legal. Wagner stressed the group's determination to focus on legal issues and the desire to reach an agreement for water for the development. Wagner again stressed that the group has no hidden agendas.

Leggieri inquired if Hurt and Leonard are partners. Wagner replied that Hurt is more of a litigation attorney and Leonard is a bond and contract attorney. It was noted Hurt and Leonard are both in the same firm; however, Leonard offices in Austin and Leonard has a local office.

Graves stated that he felt that the UTRWD should have informed both parties up front about all the legal issues involved. It was noted that an agreement could not only affect the UTRWD bonds but also the development group's bonds. Graves stated that the Board feels that it does have an obligation to get water to the development and that the Board wants to pursue the best route possible to meet that need and will cooperate with the group and the lawyers.

Wagner noted that there could be possible legal roadblocks that cannot be resolved. He stated that then both parties would need to consider other alternatives. Kilpatrick said that in his opinion the recent agreement was horrible and that the lawyers need to start over.

Ginn requested a copy of the revised master plan so that he and Leggieri could review the water demands.

It was again noted that the lawyers would be meeting to determine the legal issues and viable alternatives. Graves reiterated the Board's willingness to cooperate and offered to hold special meetings to expedite resolving the issues. Graves stated that the Board would take no action as this item would be considered later in Executive Session. The representatives of the group left the meeting at 7:26 P.M.

Motion by Kaufman and second by Warholy to approve the Consent Agenda. The motion carried unanimously. The items approved were:

4. Approve Minutes of November 18, 1999.

5. Accept the November 1999 Disbursements and Financials

6. Approve the 1999 Audit Engagement Letter with Ken Hughes & Associates

9. Discussion and Action on Membership Discontinuance and Reactivation Policy.

Following discussion on the policy and the varying situations that occur when a meter is discontinued, the Board referred the policy back to the staff for revisions.

2. Executive Session

President Graves announced that the Board would convene in Executive Session at 7:41 P.M. concerning the following:

A. All Matters Related to Development of the Rayzor Ranch Including Approval of a Water Service Agreement Between BWSC and DCDD#4, Pursuant to Government Code, Section 551.071.

The Board took no action and reconvened in Open Session at 8:00 P.M. Phillips left the meeting.

3. Public Forum

Graves stated that no one was present for this item. He noted that if any one arrived later, the Board would return to this item.

10. Discussion and Action on 1999 Contribution to the BWSC Employee Profit Plan.

Motion by Kilpatrick to contribute $8,998.99 for the 1999 contribution to the Employee Profit Sharing Plan. Second by Alberts. Kilpatrick amended his motion to state that a 5% contribution of the W2 wages for qualified employees would be made to the Employee Profit Sharing Plan for 1999. Alberts accepted the amended motion. The amended motion was approved unanimously.

Discussion was held on who qualifies for the plan, where the investments are held and who is responsible for the Employee Profit Sharing Plan. Staff reported that the funds are invested in Kemper Funds and that Kilpatrick is the trustee. Kilpatrick reported that he and the financial representative at Ken Hughes & Associates determine how to invest the funds. The Board requested that a copy of the 1999 Annual Employee Benefit Plan Report be included in the packets when it completed for filing with the Internal Revenue Service in 2000.

11. Discussion and Action on All Matters Associated with the Following:

A. Carruth Estates
Leggieri reported that the developer would be in next week to pay the fees.
B. County Oaks Phase II
Leggieri reported that the water mains have been installed and are being pressure tested.
C. Copper Woods/Including Off Site Water Main Construction
Leggieri stated that the landscaping at the camp has not been completed; therefore, the contractor who installed the water line for BWSC cannot be paid. Leggieri said that he would meet with a representative of the camp next Tuesday.
D. Hidden Creek
Leggieri stated that he would take this item off his report as the Town of Copper Canyon has not approved the subdivision. Leggieri reported that he talked to with the Crossroads Bible Church's engineer who informed him that the church would be submitting a new plan for the development of its property as the UTRWD would be providing wastewater service to the property via The City of Highland Village. Leggieri noted that the plans indicate that wastewater service could be available to the Hills of Chinn Chapel if The Town of Double Oak wished to participate. Leggieri said that the developer who purchased the E System property plans a 115 home subdivision and a 14 acre commercial area with wastewater service. Leggieri noted that BWSC has the potential for a number of new customers.

12. Staff and Consultant Reports.

Staff reminded all the Directors about the Christmas Party at 7:00 P.M. on Wednesday, December 15, 1999.

Leggieri reported that a test was performed on the generator at the Copper Hill Station on December 8, 1999 and it worked fine. He also reported that the hatches on the tanks have been modified and representatives from TCEQ will review the system on December 20, 1999 and make recommendations to the state for the Superior Water Rating.

13. Review Future Agenda Items, Activities and Announcements, Set Date and Time of the January Regular Meeting.

The next meeting was set for Thursday, January 13, 2000. Kaufman requested agenda items for the potential for drilling additional wells and a review of the purchase of additional water from the UTRWD.

2. Executive Session:

President Graves announced that the Board would convene in Executive Session at 8:22 P.M. concerning the following:

E. All Matters Related to Personnel Pursuant to Government Code, Section 551.071.

The Board took no action and reconvened in Open Session at 8:27 P.M.

8. Discussion and Action on All Matters Related to Personnel.

No action was taken.

14. Adjournment

Motion by Kilpatrick and second by Warholy to adjourn the meeting. Motion approved unanimously; the meeting adjourned at 8:31 P.M.

Recorded by Betty Robertson, Deputy Secretary-Treasurer

Certified by Larry Kaufman, Secretary-Treasurer

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