MINUTES OF A SPECIAL MEETINGOF THE BOARD OF DIRECTORS OF THE

BMR METROPOLITAN DISTRICTHELD NOVEMBER 3, 2010

A special meeting of the Board of Directors of the BMR Metropolitan District was heldon Wednesday, November 3,2010 at 6:00 p.m. at Lowell Ranch, 2330 South 1-25, CastleRock, Colorado 80104. The meeting was open to the public.

Attendance In attendance were Directors:Jeanne DasselAlan CobbBob BrabecRussell GrantKirk Fischer

Residents and others in attendance:Al Hawkins; 1238 Riva Rose Circle, Castle Rock, COJean Brabec; 3195 Glade Gulch Circle, Castle Rock, COLynne Norwood; 3590 Winterhawk Circle, Castle Rock,COJack Shiker; 4424 Mariposa Road, Castle Rock, COAl Quist; 908 Glade Gulch Road, Castle Rock, COJustin Kolb; 1271 Rosewind, Castle Rock, COMickey Fouts; 4106 High Spring Road, Castle Rock, CODoug Hall; 1308 Glade Gulch Road, Castle Rock, CO

Also in attendance:Tim Flynn, Esq.; Collins Cockrel and ColeJeff Sucher; Treatment Technology, Inc.Chuck Reid; R.S. Wells LLC / Clifton Gunderson LLP

Call to Order Director Dassel, called the meeting to order at 6:00 p.m. and verifieda quorum present.

Conflicts ofInterest Mr. Flynn reported that all of the Directors had previously filed

Disclosure of Potential Conflict ofInterest Statements with theBoard and with the Secretary of State in accordance with statutoryrequirements. Such conflicts arise because each Director is also aDirector on the Consolidated Bell Mountain Ranch MetropolitanDistrict. The Consolidated Bell Mountain Ranch MetropolitanDistrict has entered into and may from time to time enter intoadditional agreements with the BMR Metropolitan District.Director Brabec disclosed that in addition to the foregoing he sitson the Board of Directors of the Bell Mountain RanchHomeowners Association.

All Disclosure of Potential Conflict of Interest Statements, whetherfiled for this meeting or previously filed are deemed continuing in

RECORD OF PROCEEDINGS

Approval ofAgenda

AdministrativeMatters

nature and are incorporated into the record of this meeting. AllDirectors stated that the participation of at least three of them inthe meeting was necessary to obtain a quorum of the Board orotherwise enable the Board to act.

After each Director had summarily stated for the record the factand nature of his or her respective private interest and stated thatthe determination to participate in voting or take any other actionon any contract or other matter in which he or she may have aprivate interest would be made in compliance with Section 24-18-201 (l)(b)(V), C.R.S., on an ad hoc basis, the Board turned itsattention to the remaining agenda items.

Following discussion, upon a motion duly made by DirectorBrabec, seconded by Director Grant and, upon vote, unanimouslycarried, the Board approved the agenda as presented.

A. Review and Approval of October 5, 2010 RegularBoard Meeting Minutes

Upon a motion duly made by Director Grant, seconded by DirectorBrabec and, upon vote, unanimously carried, the Board approvedminutes of the October 5, 2010 regular board meeting as presented.

B. Review and Consider Approval of Claims

Following review and discussion, and upon a motion duly made byDirector Brabec, seconded by Director Grant and, upon vote,unanimously carried, the Board approved claims totaling$66,024.28, represented by check numbers 1999 through 2013.Director Brabec noted that the claims included $13,711 spent tohaul water.

C. Review and Consider Approval of Financial Statements asof September 30, 2010

The Board reviewed the Financial Statements as of September 30,2010. Following discussion, Director Grant moved and DirectorFischer seconded a motion accepting the Financial Statements aspresented. The motion passed unanimously.

D. Consumption and Charges Report

The Board reviewed the information handed out at the meeting andtook no action on this item.

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RECORD OF PROCEEDINGS

2011 Budget

Discussion Items

Action Items

A. Conduct Public Hearing to Consider Adoption of 20 11Budget, Appropriate Expenditures and Certify Mill Levies;Consider Adoption of Resolutions to Adopt 2011 Budget,Appropriate Expenditures and Certify Mill Levies

Upon a motion, the Board opened the public hearing regarding theadoption ofthe 2011 budget at 6:04 p.m. Mr. Reid noted that thepublic hearing notice had been published in the local paperregarding the 2011 budget. Director Cobb presented the proposed2011 budget, noting:

• Revenue estimates rely on the same rate and fee structureas 2010;

• Expenditures anticipate a similar level of operations'expenses; the replacement of approximately 75 meters; andconstruction of the alternate point of diversion well.

There being no comment from the public, upon a motion, theBoard closed the public hearing at 6:13 p.m.

The Board considered the resolutions adopting the 2011 budget,certifying mi11levies and appropriating expenditures.

Upon a motion by Director Cobb, seconded by Director Grant and,upon vote, unanimously carried, the Board adopted Resolution2010- 11 - 1, subject to final adjustments made by the accountantand attorney, as needed.

Upon a motion by Director Cobb, seconded by Director Grant and,upon vote, unanimously carried, the Board adopted Resolution2010 - 11 - 2, subject to final adjustments made by the accountantand attorney, as needed.

Upon a motion by Director Grant, seconded by Director Brabecand, upon vote, unanimously carried, the Board adoptedResolution 2010 - 11- 3, certifying a zero mi11levy.

None.

The Board discussed service suspension procedures forsubstantially delinquent accounts. Mr. Reid noted that when ahomeowner is making good faith effort to address a delinquentaccount, R.S. Wells / Clifton Gunderson works with thehomeowner, and noted that sometimes the delinquent accountsneed review and consideration by the Board. The Board instructedMr. Reid not to notify customers of intent to suspend water service(due to a delinquent account) without first notifying the Board.

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RECORD OF PROCEEDINGS

The Board requested that Mr. Flynn research the regulations of thedistrict and, where needed, draft clear procedures for suspension ofwater service.

Following discussion, Director Brabec moved and Director Fischerseconded a motion approving the initiation water servicesuspension the delinquent account in question.

Attorney Items None.

Engineer A. Lot 98 Feasibility Study

The Board discussed the water service feasibility study for Lot 98,which is under contract for purchase. The feasibility study wasdistributed to the Board at the meeting.

Following a motion by Director Brabec, seconded by DirectorCobb and, upon vote, unanimously carried, the Board authorizedthe release of the feasibility study to the buyer.

It was noted that release of the report is not a commitment toprovide service and any commitment to provide water must benegotiated between the District and the Lot Owner.

Mickey Fouts, the owner of Lot 98, noted that he pays taxes toConsolidated Bell Mountain Ranch Metropolitan District and theLot has water rights for on-site irrigation.

Water System A. Monthly System Report

Mr. Benson Smith reviewed the report with the Board, noting thefollowing:

• The water leaving the plant meets and exceeds all statewater quality standards. There are water quality challengesdue to the distribution system. Treatment Technology islooking at options to address these issues.

• An onsite meeting with TetraTech was conducted onOctober is" with H.C. Liang and Mark Klee fromTetraTech along with Directors Cobb and Brabec. Themeeting went well and recommendations for treatment arebeing finalized.

• On November 2nd, B.C. Liang sent an email with the

instructions for chemical dosing while final4

RECORD OF PROCEEDINGS

Directors' Items

recommendations are being completed. TreatmentTechnology will implement these changes immediately.

• Treatment Technology has done water quality testing asrequested by Tetra Tech. These results have been passedalong to TetraTech for analysis.

Automatic Flushing Device for Autumn Sun Circle:• Treatment Technology flushed Autumn Sun Circle on

October 4th in response to a customer complaint. By doingso, the distribution system became stirred up with sedimentand required additional flushing to clear up the water.

• Treatment Technology met with C&L Backhoe and theydetermined a suitable location for the automatic flushingdevice to be installed on Autumn Sun Circle.

• H.C. Liang sent an email indicating this would be a goodidea for Autumn Sun Circle, provided the flow rate wouldnot be at very high rates. The automatic flushing devicecan be set for flow rate and duration as part of itsspecifications.

• The quote for the device and installation has been sent tothe Board for review.

The Board requested that Treatment Technology hold action on theautomated flushing device on Autumn Sun Circle until December,pending addition work with the engineers. It was discussed thatiron and manganese may be coming "out of solution" when thewater temperature increases. Bonding chemicals in the watertreatment process are being adjusted to address this issue, whichhave the added benefit of resulting in no phosphorous discharge.The Board requested that Treatment Technology notify them whenthey change the pH and chemicals.

The Board discussed joining Chatfield Authority. Director Dasseldoes not believe it necessary that the District join, nor lease or buyphosphorous allocations. Further study of the impact following theproposed changes in treatment processes are needed to determinewhether the District is in fact discharging any phosphorous andthus within the regulatory requirements set by the Authority.Following discussion, upon a motion duly made by DirectorBrabec, seconded by Director Cobb and, upon vote, unanimouslycarried, the Board tabled the request pending completion oftreatment changes and the testing results to be conducted byTreatment Tech with oversight review by Tetra Tech.

None.

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RECORD OF PROCEEDINGS

Other Business

Community Items

Adjournment

None.

None.

There being no further business to come before the Board, theBoard adjourned the meeting at 7:00 p.m.

The foregoing minutes were approved by the Board of Directors onthe ~. day of -72, t-1 /.if"r i/ , 20-tO~-vi c iJ

.J

The foregoing record constitutes a true and correct copy oftheminutes of the above-referenced meeting.

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