RECORD OF PROCEEDINGS

MINUTES OF A REGULAR MEETING OF THE BOARD OF DIRECTORS OF

ST. MARY’S GLACIER WATER AND SANITATION DISTRICT

Held: Thursday, October 9, 2006 at 6:00 pm at the Alice School House, Silver Creek Road, Idaho Springs, CO.

ATTENDANCE: A regular meeting of the Board of Directors of the St. Mary’s Glacier Water and Sanitation District, Clear Creek County, CO, was called and held as shown above and in accordance with the applicable statutes of the State of Colorado, with the following directors present and acting:

Paul Johnson

John Pacetta

C.J. Galbraith

Kevin Zegan, excused absence

Also in attendance: Fred Huff, District Counsel, Jack Barker of AAA, District Manager, Carmen Barker, District Bookkeeper, Mike Lutz of Integra Engineering and members of the public.

CALL TO ORDER: John Pacetta called the meeting to order at 6:00 pm.

APPROVAL OF MINUTES: Minutes for September 2006 were unanimously approved as submitted.

FINANCIALS: By unanimous vote the Board approved the following: payment of outstanding invoices in the amount of $40,918.61; institution of quarterly billing, effective January 1, 2007; transfer of $50,000 from the operating account to the Colorado Trust account; issuing an ‘intent to lien’ letter to all members of the District with an outstanding balance in excess of $300; and authorization of Masini & Co. to perform the District audit for 2006, for an amount not to exceed $4700.

MANAGER’S REPORT Jack Barker submitted his written report, which included an update of all ongoing projects for the District.

ENGINEER’S REPORT Mr. Lutz indicated that items of priority for the District to consider for next years’ budget would include headworks influence screen at the WWTP and installation of another well to serve the District.

LEGAL REPORT Initial budget draft for the District was presented to the Directors. The Board unanimously approved filing of the Notice of Public Hearing on the 2007 Budget for the November meeting on 11/13/06.

PUBLIC MATTERS Mr. Lutz, District Engineer, informed Mark Williams (ski area advisor from SE Group) that the appropriate connection fee to district services would be 6 Single Family Equivalents. The first equivalent would be billed at $23,000 and the other 5 at $20,000 (as $3,000 represents the charge for the actual hookup), for a total of $123,000. Annual usage fee would also be based on 6 SFE’s. All Directors agreed that if Eclipse was looking to drill it’s own well outside the boundaries of the District, such drilling and usage would be considered injurious to the District’s water sources.

There being no further issues to discuss, the meeting was adjourned at 7:30 pm.

Approved at District meeting on December 11, 2006.

C.J. Galbraith, Secretary

St. Mary’s Glacier Water and Sanitation District