This meeting was publicly advertised in accordance with Section 84-1411 of the Nebraska Statutes by a notice on Radio Station KUVR on July 30, 2007, giving the time, date, and place of the meeting and the information that the Agenda was available in advance at the Office of the Assistant Secretary.

Individual cards giving the time, date, and place of this meeting were mailed to the Directors on July 20, 2007.

The following Directors were present:
William E. Knoerzer, President; Robert B. Dahlgren; Martin E. Mueller; Robert L. Petersen, Vice President; Robert A. Garrett; Dudley L. Nelson; Roger D. Olson, Treasurer; Robert L. Johnson; K. Scott Olson; Doyle D. Lavene, Secretary; Wendell E. Johnson; David L. Rowe;
Geoffrey K. Bogle; Gordon N. Soneson

The following Director was absent:
Owen J. McDougal, Jr.

Also present were the following:
Don D. Kraus, General Manager; Rochelle A. Jurgens, Assistant Controller; Kevin M. Boyd, Gothenburg Division Mgr.; Tim W. Anderson, Public Relations Mgr.; David R. Ford, Irrigation Division Mgr.; Jeff J. Buettner, Info. & Comm. Officer; Kent L. Aden, Asst. Real Estate Administrator; Frank C. Vetter, Real Estate Administrator; Cory A. Steinke, Civil Engineer; Greg F. Ham, Purchasing Agent; Mike A. Drain, Natural Resources Manager; Michael C. Klein, Legal Counsel; Van D. Fastenau, Customer Services Supervisor; Robert J. McCormick, Legal Counsel; Eric R. Hixson, Engineering Services Mgr.; Charles D. Brewster, Legal Counsel; Judy M. Hunt, Assistant Secretary

Others present:
Lori Potter, Kearney Hub; John Thorburn, Tri-Basin NRD

* * * * * * * *

The President announced that information for the public concerning the Open Meetings Act is posted in the Board room.

At 9:00 AM, the Board President, William E. Knoerzer, announced that the meeting was open for business and proceeded with roll call.

The minutes of the Regular Business Meeting of the Board held July 2, 2007 were presented. After discussion, it was moved by Director R. Johnson, seconded by Director Bogle, that the Board approve the minutes of the July 2, 2007 Regular Business Meeting of the Board. Upon voting on the motion, the following Directors voted therefore: Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, Mueller, Nelson, R. Olson, S. Olson, Petersen, Rowe, and Soneson. None voted no and the motion was declared carried.

The minutes of the Committee Meeting of the Board held July 27, 2007 were presented. It was moved by Director R. Olson, seconded by Director Nelson, that the Board approve the minutes of the July 27, 2007 Committee Meeting of the Board and approve the vouchers for payment. Upon voting on the motion, the following Directors voted therefore: Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, Mueller, Nelson, R. Olson, S. Olson, Petersen, Rowe, Soneson, and Bogle. None voted no and the motion was declared carried.

PUBLIC INPUT: John Thorburn reported that there will be a joint meeting of Committees from Tri-Basin NRD and Central on August 23, 2007. He also reported on a Best Management Practices field day in Loomis on August 16 and one that was held last week in Kearney County. There will be a meeting for the Over Appropriated Basin Integrated Management Plan on Tuesday, August 7th in North Platte.

BIDS – SALT CEDAR CONTROL, LAKE MCCONAUGHY: The following bids for salt cedar control at Lake McConaughy were received on August 1, 2007. Funding available does not cover the entire contract amount, but staff is recommending approval of the full contract for an estimated 3500 acres with possible funding from other sources.

It was moved by Director R. Olson, seconded by Director Nelson, that the Board award the bid for salt cedar control to North Star Helicopters, Inc. of Jasper, Texas, in the amount of $629,999.25. Upon voting on the motion, the following Directors voted therefore: R. Johnson, W. Johnson, Knoerzer, Lavene, Mueller, Nelson, R. Olson, S. Olson, Petersen, Rowe, Soneson, and Bogle. Directors Garrett and Dahlgren voted no. The motion was declared carried.

WATER SERVICE AGREEMENTS & CANCELLATIONS: The following amendments to water service agreements were presented for approval.

It was moved by Director Soneson, seconded by Director S. Olson, that the Board approve the water service agreement documents as presented. Upon voting on the motion, the following Directors voted therefore: R. Johnson, W. Johnson, Knoerzer, Lavene, Mueller, Nelson, R. Olson, S. Olson, Petersen, Rowe, Soneson, Bogle, Dahlgren, and Garrett. None voted no and the motion was declared carried.

RIGHT OF WAY TRANSACTIONS: The following right of way transaction was presented for approval:

It was moved by Director Petersen, seconded by Director S. Olson, that the Board approve the Approval for Removal of Bridge or Crossing as presented. Upon voting on the motion, the following Directors voted therefore: W. Johnson, Knoerzer, Lavene, Mueller, Nelson, R. Olson, S. Olson, Petersen, Rowe, Soneson, Bogle, Dahlgren, Garrett, and R. Johnson. None voted no and the motion was declared carried.

FARM LEASES: The following leases were presented for approval:

It was moved by Director W. Johnson, seconded by Director Nelson, that the Board approve the farm leases as presented. Upon voting on the motion, the following Directors voted therefore: Knoerzer, Lavene, Mueller, Nelson, R. Olson, S. Olson, Petersen, Rowe, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, and Knoerzer. None voted no and the motion was declared carried.

MCDERMOTT & MILLER AUDIT PROPOSAL: A new three-year proposal from McDermott & Miller for the audit for 2007, 2008 and 2009 was presented for approval at a cost not to exceed $25,380.00 for each of the three years.

It was moved by Director R. Olson, seconded by Director Lavene, that the Board approve the proposal from McDermott & Miller for the Central District audit for three years. Upon voting on the motion, the following Directors voted therefore: Lavene, Mueller, Nelson, R. Olson, S. Olson, Petersen, Rowe, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, and Knoerzer. None voted no and the motion was declared carried.

RESOLUTION 07-4 – NORTH PLATTE NRD, INTEGRATED MANAGEMENT PLAN AND RESOLUTION 07-5 – TWIN PLATTE NRD, INTEGRATED MANAGEMENT PLAN: The following resolutions were presented for approval.

RESOLUTION 07-4

WHEREAS, the North Platte Natural Resources District (NPNRD) has authority to regulate hydrologically connected groundwater; and

WHEREAS, the NPNRD has not taken any reasonable action to regulate the use of hydrologically connected groundwater within the boundaries of their district for the protection of surface water appropriations; and

WHEREAS, the upper Platte River basin is suffering a drought of historical proportions; and

WHEREAS, The Central Nebraska Public Power and Irrigation District (CNPPID) has lost significant hydropower revenues during this drought due to the pumping of hydrologically connected groundwater within the NPNRD; and

WHEREAS, CNPPID reduced releases for irrigation water service to less than half of the contracted amount due its water service customers for the past three irrigation seasons, and

WHEREAS, irrigators of hydrologically connected groundwater in the NPNRD have actually increased their use of Lake McConaughy’s historical inflows during this drought; and

WHEREAS, Legislative Bill 962 provided a period of more than three years for the NPNRD to jointly develop with the Nebraska Department of Natural Resources (NEDNR), an integrated management plan for the joint regulation of hydrologically connected groundwater and surface water; and

WHEREAS, the NPNRD and the NEDNR are now discussing whether to extend the three year period to jointly develop an integrated management plan by two more additional years; and

WHEREAS, further delay of regulation of hydrologically connected groundwater by the NPNRD causes further inequitable harm to surface water appropriators.

NOW, THEREFORE BE IT RESOLVED, that the Board of Directors of CNPPID respectfully requests:

1. The NPNRD to reasonably exercise their regulatory authority over hydrologically connected groundwater by adopting, as soon as possible, but in no case beyond April 30, 2008, based on the best available scientific data and other information, such rules and regulations as are necessary to protect Lake McConaughy’s surface water appropriations and its many beneficial uses from interference by the pumping of hydrologically connected groundwater within the NPNRD; and

2. The NEDNR to condition any extension of the three year period to jointly develop an integrated management plan upon the NPNRD agreeing upon an action plan with the NEDNR to have in place by April 30, 2008, reasonable rules and regulations for the regulation of hydrologically connected groundwater, as described in paragraph one above.

RESOLUTION 07-5

WHEREAS, the Twin Platte Natural Resources District (TPNRD) has authority to regulate hydrologically connected groundwater; and

WHEREAS, TPNRD has not taken any reasonable action to regulate the use of hydrologically connected groundwater within the boundaries of their district for the protection of surface water appropriations; and

WHEREAS, the upper Platte River basin is suffering a drought of historical proportions; and

WHEREAS, The Central Nebraska Public Power and Irrigation District (CNPPID) has lost significant hydropower revenues during this drought due to the pumping of hydrologically connected groundwater within the TPNRD; and

WHEREAS, CNPPID reduced releases for irrigation water service to less than half of the contracted amount due its water service customers for the past three irrigation seasons, and

WHEREAS, irrigators of hydrologically connected groundwater in the TPNRD have actually increased their use of hydrologically connected groundwater and associated streamflows during this drought; and

WHEREAS, Legislative Bill 962 provided a period of more than three years for the TPNRD to jointly develop with the Nebraska Department of Natural Resources (NEDNR), an integrated management plan for the joint regulation of hydrologically connected groundwater and surface water; and

WHEREAS, the TPNRD and the NEDNR are now discussing whether to extend the three year period to jointly develop an integrated management plan by two more additional years; and

WHEREAS, further delay of regulation of hydrologically connected groundwater by the TPNRD causes further inequitable harm to surface water appropriators.

NOW, THEREFORE BE IT RESOLVED, that the Board of Directors of CNPPID respectfully requests:

1. The TPNRD to reasonably exercise their regulatory authority over hydrologically connected groundwater by adopting, as soon as possible, but in no case beyond April 30, 2008, based on the best available scientific data and other information, such rules and regulations as are necessary to protect Lake McConaughy’s surface water appropriations and its many beneficial uses from interference by the pumping of hydrologically connected groundwater within the TPNRD; and

2. The NEDNR to condition any extension of the three year period to jointly develop an integrated management plan upon the TPNRD agreeing upon an action plan with the NEDNR to have in place by April 30, 2008, reasonable rules and regulations for the regulation of hydrologically connected groundwater, as described in paragraph one above.

It was moved by Director R. Johnson, seconded by Director Mueller, that the Board approve Resolutions 07-4 and 07-5 as presented. Upon voting on the motion, the following Directors voted therefore: Mueller, Nelson, R. Olson, S. Olson, Petersen, Rowe, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, and Lavene. None voted no and the motion was declared carried.

LAKE MCCONAUGHY LESSEES NEGOTIATIONS: This was discussed in Closed Session.

J-2 HYDROCYCLING AGREEMENT: Last week FERC approved the Order on the Lake Level Amendment to Central’s FERC license. As referenced in the Order, the J 2 Hydrocycling Agreement with the U.S. Fish and Wildlife Service will need approval to address issues associated with hydrocycling. Staff recommends approval of the agreement as presented.

It was moved by Director Petersen, seconded by Director R. Olson, that the Board approve the J-2 Hydrocycling Agreement with the U.S. Fish and Wildlife Service, subject to legal approval. Upon voting on the motion, the following Directors voted therefore: Nelson, R. Olson, S. Olson, Petersen, Rowe, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, and Mueller. None voted no and the motion was declared carried.

LEGAL SERVICES AGREEMENT – ANDERSON, KLEIN, SWAN & BREWSTER: A legal services agreement with Anderson, Klein, Swan and Brewster was presented for approval. The term of the agreement is August 6, 2007 through August 5, 2008.

It was moved by Director Lavene, seconded by Director Mueller, that the Board approve the legal services agreement with Anderson, Klein, Swan and Brewster as presented. Upon voting on the motion, the following Directors voted therefore: R. Olson, S. Olson, Petersen, Rowe, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, Mueller, and Nelson. None voted no and the motion was declared carried.

JEFFREY LAKE DEVELOPMENT, INC. V. CENTRAL – SEAWALL CASE: The District’s appeal remains pending in the Nebraska Court of Appeals.

JEFFREY & MIDWAY V. CENTRAL: Additional requests for admissions and for production of documents have been received from the plaintiffs.

HIXSON V. CENTRAL: The plaintiffs’ appeal is pending in the Nebraska Court of Appeals.

PLATTE RIVER RECOVERY AND IMPLEMENTATION PROGRAM: The next meeting for the Program is August 20-21, 2007 in Denver.

NORTH PLATTE NRD DISCUSSIONS: This was discussed in Closed Session.

PERSONNEL: There were no personnel items.

BOARD COMMENTS: The following Board comments was presented: 1) the Soybean Association and the Extension Service will be presenting a Soybean Management Field Day at Director Bob Johnson’s farm north of Hastings on Tuesday, August 14; and 2) an update was requested regarding the fire damage at the Visitors Center at Lake McConaughy.

DIRECTORS’ ATTENDANCE: It was moved by Director Petersen, seconded by Director Lavene, that the Board excuse the absence of Director McDougal from the Board Meeting. Upon voting on the motion, the following Directors voted therefore: S. Olson, Petersen, Rowe, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, Mueller, Nelson, and R. Olson. None voted no and the motion was declared carried.

OPERATIONS REPORT: The following operations reports were presented:

a. Rochelle Jurgens reported that the NPPD audit is over.

b. Kevin Boyd reported on 1) the gate certification at the Diversion Dam; 2) repair work being done on the canal banks; 3) maintenance of roads; and 4) bridge maintenance.

c. Dave Ford reported that a meeting will be held with Central water users on August 14 and that the final irrigation run will begin Tuesday, August 7, 2007.

d. Tim Anderson reported that there will be a Western Nebraska tour on Thursday with the EPA Regional Director.

e. Cory Steinke reported that Lake McConaughy is at elevation 3209.8 and is 7.2 feet higher than last year at this time. The Environmental Account has used 31 kaf as of today.

f. Eric Hixson reported that the signed 2006 reconciliation from NPPD was received today.

At 10:07 AM, it was moved by Director Petersen, seconded by Director Nelson, that the Board go into Closed Session to discuss Lake McConaughy negotiations and North Platte NRD discussions. Upon voting on the motion, the following Directors voted therefore: Petersen, Rowe, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, Mueller, Nelson, R. Olson, and S. Olson. None voted no and the motion was declared carried. President Knoerzer stated that the purpose of the Closed Session was to discuss Lake McConaughy negotiations and North Platte NRD discussions.

CLOSED SESSION

At 11:15 AM, it was moved by Director Petersen, seconded by Director Mueller, that the Board return to Regular Session. Upon voting on the motion, the following Directors voted therefore: Rowe, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, Mueller, Nelson, R. Olson, S. Olson, and Petersen. None voted no and the motion was declared carried. President Knoerzer stated that the issues discussed in Closed Session were Lake McConaughy negotiations and North Platte NRD discussions.

The meeting adjourned at 11:16 AM.

ATTEST:  THE CENTRAL NEBRASKA PUBLIC POWER AND IRRIGATION DISTRICT

Doyle D. Lavene, Secretary
By William E. Knoerzer, President