EAST VALLEY WATER DISTRICT September 12, 2006

REGULAR BOARD MEETING

MINUTES

President Sturgeon called the meeting to order at 2:00 p.m. Mr. Kenley led the flag salute.

PRESENT: Directors: Goodin, Lightfoot, Negrete, Sturgeon, Wilson

ABSENT: None

STAFF: Robert Martin, General Manager; Brian Tompkins, Chief Financial Officer; Ron Buchwald, District Engineer; Justine Hendricksen, Administrative Manager; Eileen Bateman, Executive Assistant

LEGAL COUNSEL: Steve Kennedy

GUEST (S): Jo McAndrews (McAndrews & Boyd), Willard Kenley, Jody Scott, Carol Cales (EVWD), Mike Maloney (EVWD), Ig Seifert (EVWD), Paul Pinckney (Croydon Risk Consultant), Charles Roberts (Highland Community News), Patrick Daniali, Andrew Edwards (The Sun Newspaper)

APPROVAL OF AGENDA

M/S/C (Lightfoot-Negrete) that the September 12, 2006 Agenda be approved as submitted.

PUBLIC PARTICIPATION

President Sturgeon welcomed the guests attending the Board Meeting.

The General Manager introduced District employees present at the Board Meeting

President Sturgeon declared the public participation section of the meeting open at 2:02 p.m.

There being no verbal or written comments the public participation section was closed.

APPROVAL OF BOARD MEETING MINUTES FOR AUGUST 22, 2006

M/S/C (Wilson-Lightfoot) that the August 22, 2006 Board Meeting Minutes be approved as submitted.

APPROVAL OF DEVELOPMENT AGREEMENT BETWEEN EAST VALLEY WATER DISTRICT AND HOSANNA COMMUNITY CHURCH, INC., TO SUBDIVIDE AND DEVELOP CERTAIN REAL PROPERTY WITHIN THE BOUNDARIES OF THE DISTRICT WHICH WILL CONSIST OF (2) TWO DWELLING UNITS, AND THAT THE DISTRICT PROVIDE DOMESTIC WATER AND SEWER SERVICE TO THE PROPERTY LOCATED ON THE SOUTH EAST INTERSECTION OF 14TH STREET AND VICTORIA AVENUE IN THE CITY OF HIGHLAND, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA

M/S/C (Wilson-Lightfoot) that the Development Agreement between East Valley Water District and Hosanna Community Church, Inc. be approved as submitted.

RECEIVE AND FILE LEGISLATIVE COMMITTEE MEETING MINUTES FOR JUNE 13, 2006

M/S/C (Wilson-Lightfoot) that the Legislative Committee Meeting Minutes for June 13, 2006 be received and filed as submitted.

RECEIVE AND FILE LEGISLATIVE COMMITTEE MEETING MINUTES FOR JUNE 27, 2006

M/S/C (Wilson-Lightfoot) that the Legislative Committee Meeting Minutes for June 27, 2006 be received and filed as submitted.

DISBURSEMENTS

M/S/C (Negrete-Wilson) that General Fund Disbursements #207586 through #207852 were distributed during the period of August 24, 2006 through September 6, 2006, in the amount of $1,650,305.58 and Payroll Fund Disbursements for the period ended August 18, 2006 and September 1, 2006 in the amount of $133,983.11 and $127,985.53 totaling $1,912,274.22 be approved.

President Sturgeon requested that items 11 and 12 be presented to the Board at this time.

DISCUSSION AND POSSIBLE ACTION REGARDING THREE PROPOSALS SUBMITTED TO THE DISTRICT FOR THE RENEWAL OF THE DISTRICT’S COMMERCIAL AND LIABILITY INSURANCE PACKAGE

Mr. Pinckney provided an overview of the three proposals submitted to the District; that the Insurance Committee reviewed each proposal at length and recommends that the District accept the proposal submitted by the Special District Risk Management Authority for the District’s Commercial and Liability Insurance Package for a three (3) year commitment.

M/S/C (Wilson-Negrete) that the Board approve the Commercial and Liability Insurance package submitted by Special District Risk Management Authority with a three (3) year commitment and authorize the retainment of Arroyo Insurance as the Districts broker.

LETTER TO THE BOARD OF DIRECTORS FROM JODY SCOTT REGARDING CALIFORNIA PROPOSITION 218, AND THE DISTICT’S WATER/SEWER RATE INCREASE

Ms Scott stated that the District’s current rate increase and the procedure in which the District held its Public Hearing was not in accordance with Proposition 218 or the current Bighorn decision. Ms Scott also stated that the amount of the increase needs further justification. Ms Scott requested that the District rescind its current rate increase and provide the proper notification for a future Public Hearing regarding any proposed rate increases.

Mr. Kenley stated that he concurs with Ms Scott’s concerns and requests.

HEADQUARTERS REVIEW AND SITE UPDATE

The General Manger stated that the City of San Bernardino’s plan check department is currently reviewing the District’s Headquarters project.

DIRECTORS’ FEES AND EXPENSES FOR AUGUST 2006

M/S/C (Wilson-Negrete) that the Directors’ Fees and Expenses for August 2006 be approved.

DISCUSSION AND POSSIBLE ACTION REGARDING CANCELING THE OCTOBER 10, 2006 BOARD MEETING DUE TO A CONFLICT WITH THE DISTRICT’S WATER QUALITY CONFERENCE

M/S/C (Wilson-Negrete) that the October 10, 2006 Board Meeting be cancelled.

DISCUSSION AND POSSIBLE ACTION REGARDING A PROPOSAL SUBMITTED TO THE DISTRICT FROM SOCAL PUMP & WELL DRILLING, INC. TO INSTALL A PUMP, MOTOR, AND ASSOCIATED FACILITIES FOR THE EQUIPPING OF WELL 132-5

Mr. Buchwald reviewed the proposal with the Board and recommends the Board approve the proposal submitted by SoCal Pump & Well Drilling, Inc.

M/S/C (Lightfoot-Wilson) that the proposal submitted by SoCal Pump & Well Drilling, Inc. be approved as submitted.

DISCUSSION AND POSSIBLE ACTION REGARDING PROPOSALS TO PURCHASE ONE 2007 STERLING L7500 WATER TRUCK AND ONE STERLING LT9500 DUMP TRUCK

The General Manager reviewed the proposals with the Board; that the specified vehicles will be required to comply with current Air Quality Regulations for fleet vehicles; that the Sterling LT9500 is about 10K over the anticipated amount in the current Budget.

M/S/C (Lightfoot-Negrete) that the proposals submitted for the purchase of one 2007 Sterling L7500 Water Truck and one 2007 Sterling LT9500 Dump Truck be approved.

DISCUSSION AND POSSIBLE ACTION REGARDING THE WATER SUPPLY ASSESSMENT FOR THE GREENSPOT VILLAGE AND MARKET PLACE DEVELOPMENT PROJECT

The General Manager reviewed the Water Supply Assessment for the Greenspot Village and Market Place Development Project with the Board; that new State Law requires that the District review detailed information regarding supply availability and reliability with respect to certain development projects within the District’s boundaries.

M/S/C (Negrete-Wilson) that the Water Supply Assessment for the Greenspot Village and Market Place Development Project be approved as submitted.

DISCUSSION AND POSSIBLE ACTION REGARDING THE WATER SUPPLY ASSESSMENT FOR NEWCASTLE WAREHOUSE PROJECT

M/S/C (Negrete-Wilson) that the Water Supply Assessment for the Newcastle Warehouse Project be approved as submitted.

DISCUSSION AND POSSIBLE ACTION REGARDING THE SCHEDULING OF A DISTRICT FACILITIES TOUR

A District Facilities Tour has been scheduled for October 19, 2006.

REVIEW AND ACCEPT FINANCIAL STATEMENTS FOR PERIOD ENDED JULY 31, 2006

Mr. Tompkins offered his apology and stated that the Financial Statements are not available at this time due to a computer malfunction.

No action taken.

GENERAL MANAGER / STAFF REPORTS

The General Manger reported on the District’s operations to date; that the Sterling Pipeline Project is moving forward; that the Nitrate and Perchlorate Unit located at Well 27 is in the final testing stage.

CONSULTANTS REPORTS

No reports at this time.

COMMITTEE REPORTS

President Sturgeon added an ad-hoc committee “ Tribal Negotiations”. The Committee will consist of Director Goodin, Vice President Negrete as Chair, Robert Martin and Steve Kennedy.

Director Wilson stated that the Real Estate Committee had met and will recommend to the Board that the District’s property parcel # 0291-141-18-0000 be declared surplus property.

ORAL COMMENTS FROM BOARD OF DIRECTORS

Director Wilson stated that he had attended a workshop at Eastern Municipal Water District.

President Sturgeon offered his appreciation to District staff who participated in the City of Highland’s “Discover Highland Night”; and that the unused water from that event was donated to the City of Highland’s Senior Center. President Sturgeon also stated that he met with Henry Duro from the San Manuel Band of Missions Indians.

Director Goodin stated that the District’s 1954 Chevy Truck was awarded “Best Antique Truck” at the Discover Highland Night car show. Director Goodin also stated that he, on behalf of the Board, declined the award.

ASSOCIATION OF THE SAN BERNARDINO COUNTY SPECAL DISTRICTS MEMBERSHIP MEETING, SPONSORED BY VICTOR VALLEY WATER DISTRICT, HILTON GARDEN INN, 17185 YUMA STREET, VICTORVILLE, SEPTEMBER 18, 2006

CONDUCT & ETHICS: TRAINING FOR WATER AGENCY OFFICIALS, SEPTEMBER 27, 2006 EASTERN MUNICIPAL WATER DISTRICT, PERRIS, CA

CSDA’S “ETHICS COMPLIANCE TRAINING” OCTOBER 20, 2006 IN SACRAMENTO, CA AND OCTOBER 27, 2006 IN THOUSAND OAKS, CA

The Board took a five-minute break at 3:03 p.m.

CLOSED SESSION

The Board entered in Closed Session at 3:08 p.m. as provided in the California Open Meeting Law, Government Code Section 54945.9(a), to discuss those items listed on the Agenda.

ADJOURN TO REGULAR SESSION

ANNOUNCEMENT OF CLOSED SESSION ACTIONS

The Board returned to regular session at 3:37 p.m. The items listed on the Agenda were discussed in closed session with no reportable action being taken.

ADJOURN

The meeting was adjourned at 3:37 p.m. until the next regularly scheduled Board Meeting on September 26, 2006.

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Kip E. Sturgeon, President

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Robert E. Martin, Secretary