This meeting was publicly advertised in accordance with Section 84-1411 of the Nebraska Statutes by a notice on Radio Station KUVR on September 24, 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 September 14, 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; Gary L. Bergsten, 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; Eric R. Hixson, Engineering Services Mgr.; Frank C. Vetter, Real Estate Administrator; Greg F. Ham, Purchasing Agent; Michael C. Klein, Legal Counsel; Marcia L. Trompke, Conservation Director; Robert J. McCormick, Legal Counsel; Mike A. Drain, Natural Resources Manager; Charles D. Brewster, Legal Counsel; Kent L. Aden, Asst. Real Estate Administrator; Judy M. Hunt, Assistant Secretary

Others present:
Lori Potter, Kearney Hub; Tom Schwarz, Central District Water Users; Dave Dahlgren, Pres. of Central District Water Users

* * * * * * * *

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 September 4, 2007 were presented. It was moved by Director Petersen, seconded by Director Mueller, that the Board approve the minutes of the September 4, 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 September 21, 2007 were presented. It was moved by Director W. Johnson, seconded by Director R. Olson, that the Board approve the minutes of the September 21, 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: There was no public input.

CENTRAL DISTRICT WATER USERS’ RESOLUTION: Dave Dahlgren, President of the Central District Water Users (CDWU), and Tom Schwarz discussed the resolution adopted by the CDWU Board. The resolution encourages Central’s Board of Directors to pursue the concept of implementing groundwater recharge fees as a method to equitably distribute the costs among those who benefit from the delivery of surface water to the area as the Board considers an irrigation service rate increase. The Board discussed the issues related to a potential recharge fee.

INCREMENTAL PRICING AND CONSERVATION CREDIT PROGRAM (IPCCP): The Irrigation Committee has recommended a five year phase-out of existing IPCCP credits beginning with a full delivery season. No credits would be accrued in the future. After credits were used, a charge of $1/acre-inch would be implemented for the first three acre inches used over 12 inches and a charge of $2/acre-inch would be implemented for each acre-inch over 15 inches up to 18 inches. No Board action was requested.

2008 IRRIGATION RATES: Discussion was held concerning the Board action taken on July 2, 2007 regarding an increase to the 2008 irrigation rates. After considerable discussion, the Board deferred any decision regarding an increase to the irrigation rates until the December Board meeting. Meetings with irrigation customers will be scheduled for this fall regarding the proposed rate increase. An Irrigation Committee meeting will also be scheduled in the near future to discuss the rates.

2007 BUDGET REVISION: Construction Work Order 186500 – Install New HVAC System for Survey Office Area. The need and purpose of the Work Order was discussed with the Board of Directors. This revision would replace the budget revision at the Special Board Meeting on September 21, 2007.

It was moved by Director R. Olson, seconded by Director Lavene, that the Board approve the 2007 budget revision as presented which would replace the budget revision approved on September 21, 2007. Upon voting on the motion, the following Directors voted therefore: Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, Mueller, Nelson, R. Olson, S. Olson, Petersen, Rowe, Soneson, Bogle, and Dahlgren. None voted no and the motion was declared carried.

BIDS – SURVEY HEATING, VENTILATION, AND AIR CONDITIONING: The bid tab that was presented at the Special Board Meeting on September 21, 2007 was revised due to an error and staff recommends approval of a different option from Durable Service which would still be the low bid.

It was moved by Director Petersen, seconded by Director Nelson, that the Board amend the approval of the bid from Durable Service, Inc. on September 21, 2007 to increase the amount from $5,962.00 to $9,594.00. 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.

WORK ORDER/PURCHASE REQUISITION SUMMARY: The following summary was presented for approval:

WORK ORDER/PURCHASE REQUISITION SUMMARY
October 1, 2007

1. Construction Work Order 186500, in the amount of $17,724.37 for survey office and Irrigation Area Supervisor office HVAC System.

It was moved by Director Soneson, seconded by Director Garrett, that the Board approve the Work Order/Purchase Requisition Summary 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.

CLOSURE OF CONTRACT 0-623 – SALT CEDAR CONTROL AT LAKE MCCONAUGHY: A letter dated October 1, 2007 from the General Manager to the Board of Directors was read as follows:

Gentlemen:

On August 6, 2007, Contract No. 0-623 was awarded to North Star Helicopters, Inc. for salt cedar control at Lake McConaughy for a total amount of $629,999.25. The contract was completed, spraying 1,334.2 fewer acres and using 812.9 fewer gallons of chemicals than originally estimated, for a total cost of $357,050.91.

On September 25, 2007 a fax letter was received from North Star Helicopters, Inc. requesting an adjustment of up to $6,354.90 for costs of the performance bond. In order to resolve the matter, an increase in the contract payment of $3,177.45 is recommended.

All work has been completed, inspected and found to be satisfactory. We recommend payment in the amount of $360,228.36 be to North Star Helicopters, Inc., and Contract 0-623 be closed.

It was moved by Director R. Olson, seconded by Director Dahlgren, that the Board authorize payment of $360,228.36 be made to North Star Helicopters, Inc. and Contract 0-623 be closed. 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 W. Johnson. None voted no and the motion was declared carried.

JOHNSON LAKE MOWING BIDS: Bids for a two year contract for mowing at Johnson Lake were presented as follows:

The District cost to mow the area would be $7,419.00/year.

Staff recommends awarding the bid to the low bidder, Eugene Corder.

It was moved by Director Bogle, seconded by Director Lavene, that the Board award the bid to Eugene Corder in the amount of $6,500.00 for a two year contract for mowing at Johnson Lake. 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.

COOPERATIVE AGREEMENT WITH U.S. BUREAU OF RECLAMATION – E-65 ELECTRIC GATE OPERATORS: An agreement with the U.S. Bureau of Reclamation to provide funds for installation of three automated gate operators on the E-65 canal was presented for approval. The automated gates will be remotely operated from the Gothenburg Control Center.

It was moved by Director Nelson, seconded by Director S. Olson, that the Board approve the agreement with the U.S. Bureau of Reclamation for the E-65 gate operators. 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.

2008 BOARD MEETING SCHEDULE: Discussion was held on the 2008 Board Meeting Schedule for 2008 and it was noted that the Monday, January 7, 2008 Board meeting was changed to Wednesday, January 9, 2008 due to a conflict.

It was moved by Director R. Olson, seconded by Director Mueller, that the Board approve the 2008 Board Meeting Schedule as presented. 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.

JOHNSON LAKE LEASES: This was discussed in Closed Session.

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

JEFFREY & MIDWAY V. CENTRAL: The plaintiffs’ motion for summary judgment remains scheduled for hearing on October 22 in the District Court of Lincoln County.

HIXSON V. CENTRAL: The plaintiffs’ appeal has been scheduled on the Court of Appeals proposed call for oral argument on November 12, 13, 14, or 15, 2007.

PLATTE RIVER RECOVERY AND IMPLEMENTATION PROGRAM: There was nothing new to report.

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

PERSONNEL: There were no personnel actions.

BOARD COMMENTS: The following Board comment was presented: 1) an update on the health of Director McDougal was presented.

DIRECTORS’ ATTENDANCE: It was moved by Director Lavene, seconded by Director Nelson, that the Board excuse the absence of Director McDougal from the Board Meeting. 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.

OPERATIONS REPORT: The following operations reports were presented:

a. Gary Bergsten reported that he had spent September 24–26, 2007 at an American Public Power Conference in Austin, TX. During the remainder of the week he worked on the 2008 Budget.

b. Kevin Boyd reported that 1) a 45 day extension was requested for filing the Part 12 with FERC and will be due November 1; 2) the due date for the Surveillance Monitoring Plan is December 1, 2007; and 3) the Dam Break Analysis is due January 1, 2008 and that an extension may be needed. FERC inspections were completed last week. He also reported on the dredging project at Kingsley.

c. Jeff Buettner reported that there will be a meeting next week with the Planning Committee for the Kearney Chamber/UNL Water Center Annual Water Tour for 2008. He also reported on inflows at Lake McConaughy and that the lake is at elevation 3206.8.

d. Dave Ford reported that customers have started to request the one year temporary transfers. An Irrigation Committee meeting was scheduled for October 18, 2007 at 8:00 AM.

e. Tim Anderson reported that he spoke at a Nebraska Bankers meeting last Friday and he will be speaking at a LEAD meeting today and tomorrow. The Nebraska Water Resources Association Round Table for December 12 will be sponsored by Central and the speaker will be Governor Heineman.

f. Eric Hixson reported that Central has received approval from FERC for the Lake Ogallala Channel Project and that Central is waiting for the 404 Permit from the Corps of Engineers.

g. Don Kraus reported that a signed agreement was received from Lake McConaughy Lessees, Inc. regarding lease fees. A meeting of the Water Policy Task Force was held last week and changes to state law were discussed which would clarify how to deal with the increased consumptive use after a sign-off of surface water rights. Other changes relating to the rules on the way the Department of Natural Resources handles changes in diversions were discussed. Another issue that was mentioned was “what is the value of state recognition of incidentally recharged water and the benefit to the users of that resource?”

At 10:50 AM, it was moved by Director Garrett, seconded by Director R. Olson, that the Board go into Closed Session to discuss Johnson Lake leases and North Platte NRD discussions. 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. President Knoerzer stated that the purpose of the Closed Session was to discuss Johnson Lake leases and North Platte NRD discussions.

CLOSED SESSION

At 11:10 AM, it was moved by Director R. Olson, seconded by Director Dahlgren, that the Board return to Regular Session. 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 issues discussed in Closed Session were Johnson Lake leases and North Platte NRD discussions.

2008 BUDGET: The 2008 Operating and Capital Budget was reviewed with the Board of Directors. The staff discussed the capital items that they were responsible for and the Controller reviewed the Operation and Maintenance Sections.

The Board recessed for lunch at 11:30 AM and reconvened at 12:22 PM.

Director Lavene left the meeting.

Discussion of the 2008 budget continued.

The meeting adjourned at 1:41 PM.

ATTEST:  THE CENTRAL NEBRASKA PUBLIC POWER AND IRRIGATION DISTRICT

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