This meeting was publicly advertised in accordance with Section 84-1411 of the Nebraska Statutes by a notice on Radio Station KUVR on August 27, 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 August 17, 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; Gordon N. Soneson; Geoffrey K. Bogle; Owen J. McDougal, Jr.

The following Director was absent:
David L. Rowe

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; 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; Marcia L. Trompke, Conservation Director; Charles D. Brewster, Legal Counsel; Judy M. Hunt, Assistant Secretary

Others present:
Lori Potter, Kearney Hub; Harry Dahlstrom, Holdrege

* * * * * * * *

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 August 6, 2007 were presented. It was moved by Director Nelson, seconded by Director W. Johnson, that the Board approve the minutes of the August 6, 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, McDougal, Mueller, Nelson, R. Olson, S. Olson, Petersen, and Soneson. None voted no and the motion was declared carried.

The minutes of the Committee Meeting of the Board held August 24, 2007 were presented. It was moved by Director R. Olson, seconded by Director McDougal, that the Board approve the minutes of the August 24, 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, McDougal, Mueller, Nelson, R. Olson, S. Olson, Petersen, Soneson, and Bogle. None voted no and the motion was declared carried.

PUBLIC INPUT: Harry Dahlstrom was present to explain the letters he had sent to Director Dahlgren regarding his cabin at Johnson Lake.

BUDGET REVISION: The following revision was presented to the Board of Directors and discussed: breaker repairs to Johnson #2 switchyard in the amount of $50,000.00.

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

BIDS – JOHNSON-2 BREAKER: The following bids were received on August 29, 2007 for the Johnson #2 breaker:

It was moved by Director Bogle, seconded by Director Nelson, that the Board award the bid to Siemens Power T & D of Richland, MS in the amount of $55,800.00 as recommended by staff. Upon voting on the motion, the following Directors voted therefore: R. Johnson, W. Johnson, Knoerzer, Lavene, McDougal, Mueller, Nelson, R. Olson, S. Olson, Petersen, Soneson, Bogle, Dahlgren, and Garrett. None voted no and the motion was declared carried.

BIDS – DISCONNECT SWITCHES: Two bids were received for the disconnect switches at J-2 as follows:

It was moved by Director McDougal, seconded by Director Petersen, that the Board award the bid to Pacific Air Switch Corp. of Forest Grove, OR in the amount of $16,660.00. Upon voting on the motion, the following Directors voted therefore: W. Johnson, Knoerzer, Lavene, McDougal, Mueller, Nelson, R. Olson, S. Olson, Petersen, Soneson, Bogle, Dahlgren, Garrett, and R. Johnson. 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
September 4, 2007

1. Purchase Requisition HA5619, in the amount of $16,660.00 for two disconnect switches (Pacific Air Switch Corp.) (not budgeted).

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

RESOLUTION 07-6 – 2008 IRRIGATION SEASON: The following resolution was presented for approval:

Resolution 07-6

WHEREAS, the ongoing drought and groundwater development have depleted the water supply in Lake McConaughy; and

WHEREAS, Central District staff has provided information to the Board which indicates that the following irrigation schedule is feasible for 2008:

Irrigation deliveries would begin on June 24th and end on August 19th. Irrigation service may be available prior to June 24th subject to the availability of natural flow and storage water and the schedule for filling the canals and laterals and any such deliveries shall count toward the annual delivery allocation. Deliveries will occur in 4 two-week runs at a rate of .14 acre-feet per acre per two week run for all customers except those receiving service from the supply canal. Delivery volumes, including early deliveries would be limited to .56 acre-feet per acre for all customers except for customers with 12-inch water service agreements where the delivery volume would be limited to .37 acre-feet per acre.

THEREFORE BE IT RESOLVED, that the Board of Directors find that there is a limited supply of water available in Lake McConaughy for irrigation in 2008 and approves delivery in accordance with the above description with the understanding that deliveries will not increase unless there is a substantial increase in water supply.

It was moved by Director Dahlgren, seconded by Director R. Olson, that the Board approve Resolution 07-6 as presented. Upon voting on the motion, the following Directors voted therefore: Lavene, McDougal, Mueller, Nelson, R. Olson, S. Olson, Petersen, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, and Knoerzer. 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 Soneson, seconded by Director Mueller, that the Board approve the Application for Removal of Bridge or Crossing as presented. Upon voting on the motion, the following Directors voted therefore: McDougal, Mueller, Nelson, R. Olson, S. Olson, Petersen, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, and Lavene. None voted no and the motion was declared carried.

CAPTAIN’S QUARTERS MODIFICATION AGREEMENT: The modification agreement for the Captain’s Quarters original lease agreement will increase by approximately 29,470 square feet the tenant’s leased premises; rent for the leased premises will be increased by $192.00 for the period of August 1, 2007 through April 30, 2008 and then by $256.00 from May 1, 2008 through April 30, 2009.

It was moved by Director Bogle, seconded by Director Petersen, that the Board approve the modification agreement for Captain’s Quarters as presented. Upon voting on the motion, the following Directors voted therefore: Mueller, Nelson, R. Olson, S. Olson, Petersen, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, and McDougal. None voted no and the motion was declared carried.

RENTAL RATES: The following rental rates which would be effective January 1, 2008 were presented for approval:

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

JOHNSON LAKE LEASE MODIFICATION: A modification to the Johnson Lake Lease was presented for approval. The modification reads as follows: “The Leased Premises is subject to a license for ingress and egress across the Southeast corner of the Leased Premises for access to Mallard Cove, Sec. E, Lot 9 (Sec. 1-8-23), also known by the 911 Enhanced Address, 14 Mallard Cove Dr. 19B, now consisting of a part of a driveway, that part affecting the Leased Premises being approximately 10 feet in width.” This language would go in the lease for lot 7 and lot 16 allowing lot 14 to have minimal access over approximately 10 feet of the two lots.

It was moved by Director R. Olson, seconded by Director Dahlgren, that the Board approve the Johnson Lake Lease Modification, subject to new leases being signed by adjacent cabin owners. Upon voting on the motion, the following Directors voted therefore: R. Olson, S. Olson, Petersen, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, McDougal, Mueller, and Nelson. None voted no and the motion was declared carried.

LITTLE KNAPPLE LAKE – PROPERTY OWNER AGREEMENTS: All the agreements which were discussed at the Committee meeting of the Board on August 24, 2007 have been received and are ready for Board approval. The agreements include: 1) a grant of easement for erosion rights, setback restrictions and erosion control structures with William R. Berryman, Jerry J. Smith & Richard H. Davis; 2) lease agreement with Berryman Enterprises, agreement for erosion rights, setback restrictions, erosion control structures and special water access facilities, permit application and permit to construct for existing wood dock, watercraft lift and riprap; 3) a grant of easement for erosion rights, setback restrictions and erosion control structures with William R. & Karen M. Berryman; 4) agreement for erosion rights, setback restrictions, erosion control structures and special water access facilities, permit application and permit to construct for existing wood and steel dock with end “T” dock section with Jerry J. & Jill M. Smith; and 5) lease agreement, agreement for erosion rights, setback restrictions, erosion control structures, special water access facilities, and permit application and permit to construct for existing wood and steel dock, watercraft lift and concrete bag seawall with Richard H. & Dorothy P. Davis.

It was moved by Director Lavene, seconded by Director Mueller, that the Board approve the Little Knapple Lake agreements as presented, subject to approval by FERC. Upon voting on the motion, the following Directors voted therefore: S. Olson, Petersen, Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, McDougal, Mueller, Nelson, and R. Olson. None voted no and the motion was declared carried.

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

JEFFREY LAKE DEVELOPMENT, INC. V. CENTRAL – SEAWALL CASE: The District’s appeal of the Lincoln County District Court’s decision remains pending in the Nebraska Court of Appeals. The Court of Appeals has not yet scheduled the appeal for oral argument.

JEFFREY & MIDWAY V. CENTRAL: The plaintiffs’ motion for summary judgment has been scheduled for hearing on October 22, 2007 in the district court.

HIXSON V. CENTRAL: The plaintiffs’ appeal of the Gosper County District Court’s decision remains pending in the Court of Appeals.

PLATTE RIVER RECOVERY AND IMPLEMENTATION PROGRAM: Discussion at the last meeting of the Program included a possible delay of the Pallid Sturgeon “Stage Change Study”.

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

PERSONNEL: This was discussed in Closed Session.

BOARD COMMENTS: The following Board comment was presented: 1) a question was raised on the possibility of increasing irrigation rates. The Irrigation Committee will meet to discuss the rates.

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

OPERATIONS REPORT: The following operations reports were presented:

a. Gary Bergsten reported that good progress was being made on the fiscal 2008 budget. He also mentioned that he had been notified of some missing forms, discovered during the final year of the District’s contract with the Bureau of Reclamation. A notice of a fine has been received from the Bureau of Reclamation.

b. Kevin Boyd reported that the spraying of the salt cedar at Lake McConaughy was completed on Wednesday, August 29, and approximately half of the budgeted amount was expended. He also reported that Dredge America will be on site on Friday (Sept. 7) and begin dredging at Lake McConaughy on September 12, 2007. The FERC Annual Inspection will take place next week. The Part 12 Inspection is due October 1, 2007, the Surveillance Monitoring Plan is due December 1, 2007, and the Dam Break Analysis deadline is December 31, 2007.

c. Mike Drain reported that the Fish and Wildlife Service has filled the Environmental Account Manager position and the individual’s name is Greg Wingfield.

d. Dave Ford presented a recap of the 2007 irrigation season.

e. Cory Steinke reported that Lake McConaughy is at elevation 3205.4 which is 6.4 feet higher than this time last year. Jeffrey Lake has filled to winter levels and Johnson Lake is about 4 feet low.

f. Eric Hixson reported that testing has been done at J-2 regarding the cooling water for the generator. Modifications were done so only the water from the shallow wells would be around the plant. It appears that one additional shallow well would supply adequate cooling water during high temperatures.

At 10:30 AM, it was moved by Director McDougal, seconded by Director Lavene, that the Board go into Closed Session to discuss Lake McConaughy Lessees negotiations, North Platte NRD discussions, and personnel. Upon voting on the motion, the following Directors voted therefore: Soneson, Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, McDougal, Mueller, Nelson, R. Olson, S. Olson, and Petersen. None voted no and the motion was declared carried. President Knoerzer stated that the purpose of the Closed Session was to discuss Lake McConaughy Lessees negotiations, North Platte NRD discussions, and personnel.

CLOSED SESSION

The Board recessed for lunch at 11:32 AM and reconvened at 12:38 PM.

At 1:40 PM, 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: Bogle, Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, McDougal, Mueller, Nelson, R. Olson, S. Olson, Petersen, and Soneson. None voted no and the motion was declared carried. President Knoerzer stated that the issues discussed in Closed Session were Lake McConaughy Lessees negotiations, North Platte NRD discussions, and personnel.

LAKE MCCONAUGHY LESSEES NEGOTIATIONS: It was moved by Director Mueller, seconded by Director Petersen, that the Board accept the proposal from the Lake McConaughy Lessees dated July 23rd with two exceptions. The look-in would be in ten years and the index, after reaching $1,500.00, would be 4% per year. All other aspects of the original contract would remain in effect. Upon voting on the motion, the following Directors voted therefore: Dahlgren, Mueller, and Petersen voted yes. Directors Bogle, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, McDougal, Nelson, R. Olson, S. Olson, and Soneson voted no. The motion was defeated.

It was moved by Director Garrett, seconded by Director Dahlgren, that the Board authorize the General Manager to continue negotiations with Lake McConaughy Lessees, Inc. within the parameters given in Closed Session. Upon voting on the motion, the following Directors voted therefore: Dahlgren, Garrett, R. Johnson, W. Johnson, Knoerzer, Lavene, McDougal, Mueller, Nelson, R. Olson, S. Olson, Petersen, Soneson, and Bogle. None voted no and the motion was declared carried.

The meeting adjourned at 1:47 PM.

THE CENTRAL NEBRASKA PUBLIC POWER AND IRRIGATION DISTRICT

ATTEST:

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