GUADALUPE-BLANCO RIVER AUTHORITY Minutes of the Board of Directors

GUADALUPE-BLANCO RIVER AUTHORITY Minutes of the Board of Directors The Board of Directors of the Guadalupe-Blanco River Authority met in a regular monthly meeting on December 15, 2004, at the Wells Fargo Bank, One O Connor Plaza, 5 th Floor Communications Room, Victoria, Texas. Directors present were Stephen F. Wilson, DVM, John P. Schneider, Jr., Myrna P. McLeroy, Frederick S. Schlather, Frank J. Pagel, Jack R. Gary, Margaret M. Grier, and Clifton L. Thomas, Jr. Director Kathleen A. Devine was absent. Also present were W. E. West, Jr., General Manager; Fred M. Blumberg, Deputy General Manager and Chief Operations Officer; Alvin Schuerg, Executive Manager of Finance and Administration; Randy Worden, Executive Manager of Business Development and Resource Management; Gary Asbury, Manager of Project Engineering; Judy Gardner, Manager of Communications and Education; Tommy Hill, Chief Engineer; Debbie Magin, Director of Water Quality Services; Tommie Streeter-Rhoad, Economic Development Manager; Bryan Serold, Operations Manager-Lower Basin; David Welsch, Director of Project Development; Todd H. Votteler, Director of Natural Resources and Special Assistant to the General Manager; Cricket Dietert, Executive Assistant to the General Manager; Janet Thome, Trust Coordinator; Connie Rothe, Board Relations Assistant; Angela Baxley, Network Administrator; Sandra Terry, Accountant; Roger Nevola, legal counsel; Jim Dublin representing Dublin and Associates, Inc.; Pat Wagner representing Holtman, Wagner and Company; Dr. Robert Brandes; J. S. Schovatsa representing Victoria County Farm Bureau; Henry Roy Schaar representing the Independent Cattlemen s Association; Bill XLIX 12/15/04 13

Jones representing the O Connor Ranches; Jim Blackburn representing D.M. O Connor interests; Art Dohmann, John Duke, and Wanda Duke representing the Goliad County Groundwater Conservation District; Floyd R. Jaster a Victoria rancher; Troy Littrell and Charles Holbrook representing the U. S. Fish and Wildlife Service; Jerry James representing the City of Victoria; Will Armstrong, Mayor-City of Victoria; Ken Schustereit and Bill Richter representing Water Research Group; Garrett Engelking representing the Refugio Groundwater Conservation District; Mike Mercer representing Mercer Construction Company; Gary Middleton and Bob Keith representing the South Central Texas Water Advisory Committee; Donald Pozzi, Victoria County Judge; Glenda Savierc representing Texas Commission on Environmental Quality; Bob McCurly representing PVGCD; Fred Arce representing the San Antonio Water System; Beatrice Dempsey; James Dodson and Roger Welder representing J.F. Welder Heirs, Ltd; Lisa Peterson representing Representative Geanie Morrison; and Greg Bowen representing the Victoria Advocate. The meeting was called to order at 9:05 a.m., by Chairman Wilson who took note of the certifications presented by the General Manager that notice of the meeting had been properly posted in the office of the Secretary of State, in the Guadalupe and Victoria County Courthouses, the Wells Fargo Bank located at One O Connor Plaza, and at the GBRA main office in Seguin, Texas, pursuant to Title 5, Chapter 551 of the Government Code. A quorum being present, the following proceedings were had: Director McLeroy led the United States Pledge of Allegiance and the Texas Pledge of Allegiance. XLIX 12/15/04 14

The Chairman called for comments from the public. Mayor Will Armstrong of the City of Victoria welcomed everyone to Victoria. Victoria County Judge Donald Pozzi welcomed GBRA and guests to Victoria County and stressed the importance of water in Victoria County. The Chairman read portions of GBRA Board Policy 103-Public Access and Public Input. Chairman Wilson informed members of the audience requesting to address the Board of a three-minute time limit for presentations and instructions for addressing the Board. The Chairman called for Mr. J. D. Schovatsa representing the Victoria County Farm Bureau. Mr. Schovatsa expressed opposition to the Lower Guadalupe Water Supply Project. Mr. Henry Roy Schaar, representing the Independent Cattlemen s Association addressed the Board and expressed concern regarding the Lower Guadalupe Water Supply Project. He feels the project will have a severe impact on groundwater supply during times of drought. The Independent Cattlemen s Association has formally adopted policy opposing the Lower Guadalupe Water Supply Project. Mr. Bill Jones representing the O Connor Ranches addressed the Board regarding the Lower Guadalupe Water Supply Project. Mr. Jones informed the Board there is opposition in the Lower Basin relating to the Lower Guadalupe Water Supply Project and that many organizations have adopted opposition to the exportation of water from the lower region of the Guadalupe Basin. Mr. Jim Blackwell representing D. M. O Connor Interests addressed the Board relative to Matagorda Bay. Mr. Blackburn has concerns regarding the diversion of water from San Antonio Bay to the City of San Antonio. He questioned the amount of freshwater inflow required to support XLIX 12/15/04 15

San Antonio Bay. Mr. Blackburn would like for GBRA, San Antonio River Authority and San Antonio Water System to delay the Lower Guadalupe Water Supply until all studies regarding freshwater inflows for San Antonio Bay are completed. He would also like the Project to be reconsidered before proceeding with the permitting process for the Project. Mr. Blackburn presented the Board a book. Mr. Art Dohmann a property owner on Coleto Creek and Director representing the Goliad Groundwater Conservation District discussed concerns relative to groundwater supplies during a drought and questioned if there would be sufficient water to meet all needs of the Guadalupe Basin and the City of San Antonio as proposed in the Lower Guadalupe Water Supply Project. He informed the Board that groundwater tables will drop and springs will go dry, including the springs on his property. Mr. Dohmann also informed the Board that a reduction in the amount of river water will result in drawdowns on groundwater and there will be no groundwater available in the Victoria area for transportation to the City of San Antonio. Mr. Floyd R. Jaster, a Victoria rancher, addressed the Board regarding weather statistics and drainage concerns in the Lower Basin area. He informed the Board that releases from Canyon are at the maximum and the river in the Bloomington area is still in flood stage. Mr. Jaster stated that the Guadalupe River is not draining properly at the lower end of the river. Mr. Ken Schustereit, representing Water Research Group, addressed the Board and invited everyone to a boat ride down the river to see the mess being caused by the dams and flood control GBRA is operating. He stated that the flood has receded everywhere except in Victoria and GBRA cannot continually flood property and get away with it. Mr. Schustereit s opinion is that the XLIX 12/15/04 16

majority of the people in the Lower Basin are opposed to the Lower Guadalupe Water Supply Project. He stated that it is junk science being performed by GBRA, San Antonio Water System, and San Antonio River Authority. He also held a large water bottle with brown rings on the inside and stated this is the quality of water supplied by GBRA and the City of Victoria. Mr. Mike Mercer representing Mercer Construction Company, addressed the Board about his concerns regarding the Lower Guadalupe Water Supply Project. He does not see any benefits that the Project will bring to the environment and community and that water is our Region s most valuable resource. Mr. Mercer would like a detailed explanation of the benefits the Lower Guadalupe Water Supply Project will bring to our Region. The Chairman called for Items from the Chairman 1 - Election of Officers of the Board of Directors for calendar year 2005. Director Gary of the Nominating Committee, presented the following slate of officers for calendar year 2005: Chairman John P. Schneider, Jr.; Vice-Chairman Stephen F. Wilson, DVM; and Secretary-Treasurer Myrna P. McLeroy. Upon motion by Director Thomas, seconded by Director Pagel, the Board unanimously approved by acclamation the slate of officers for calendar year 2005 as recommended by the Nominating Committee. Next, the Chairman called for Items from the Chairman 2 Consideration of and possible action authorizing the expenditure of funds for Directors and staff to attend the 5th Annual TRWA/TWCA Water Law Seminar, January 27-28, 2005, in Austin, Texas. Upon motion by Director Gary, seconded by Director McLeroy, the XLIX 12/15/04 17

Board unanimously authorized the expenditure of funds for Directors and staff to attend the 5 th Annual TRWA/TWCA Water Law Seminar in Austin, Texas. The Chairman then called for Consent Items 3 - Consideration of and possible action approving the November 17, 2004 Board meeting minutes; 4 - Consideration of and possible action approving the monthly financial report for November 2004; 5 - Consideration of and possible action approving the monthly operations report for November 2004; and 6 - Consideration of and possible action approving Directors expense vouchers. Upon motion by Director Gary, seconded by Director McLeroy, the Board unanimously approved Consent Items 3, 4, 5, and 6. The Chairman called for Action Item 7 - Consideration of and possible action approving the January 1, 2004 actuarial valuation for the Retirement Plan for Employees of GBRA and approving the calendar year 2004 contribution to the Plan. One of two basic retirement programs for employees of GBRA is a defined benefit pension plan. It is funded by GBRA and no employee contributions are contributed. An Actuarial Valuation is prepared each year calculating the annual contribution into the Plan. The GBRA Retirement and Benefit Committee met in November 2004 to review the Actuarial Valuation and approved the annual contribution of $514,051. Upon motion by Director Gary, seconded by Director Pagel, the Board unanimously approved the January 1, 2004 actuarial valuation for the Retirement Plan for Employees of GBRA and approved the calendar year 2004 contribution to the Plan in the amount of $514,051. XLIX 12/15/04 18

The Chairman then called for Action Item 8 - Consideration of and possible action approving the Fiscal Year 2004 Annual Financial Audit and distribution of the Comprehensive Annual Financial Report. Section 7 of the GBRA Enabling Act and Section 7.02 of the GBRA By-Laws requires that GBRA complete an annual audit of the books of account and financial records. On June 16, 2004, the Board approved the firm of Holtman, Wagner and Company, LLP to conduct the Fiscal Year 2004 audit. The audit started shortly thereafter with interim tests prior to year end and recently concluded with the final review of GBRA s basic financial statements and footnote disclosures. The audit process and results were discussed with the GBRA Audit Committee during their November 17, 2004 meeting. Holtman, Wagner has issued their unqualified opinion related to the presentation of GBRA s financial position as of August 31, 2004. The audit firm has also provided their annual Management Letter in addition to a Report on Compliance and on Internal Controls, which is a required report for all federal grant recipients. Pat Wagner representing Holtman, Wagner addressed the Board regarding the audit for GBRA. Ms. Wagner briefed the Board on the executive summary of the Management Letter and extended thanks to the GBRA staff. GBRA has received the Government Finance Offers Association (GFOA) award for thirty years. The report was distributed to the Board. Upon motion by Director Gary, seconded by Director Thomas, the Board unanimously approved the Fiscal Year 2004 annual audit. Next, the Chairman called for Action Item 9 - Consideration of and possible action authorizing the General Manager to negotiate and enter into a contract XLIX 12/15/04 19

with the lowest responsible bidder or reject all bids for the Seguin building expansion project. There was no discussion or action taken on Action Item 9. The Chairman called for Action Item 10 - Consideration of and possible action authorizing the General Manager to negotiate and enter into a contract with the lowest responsible bidder or reject all bids for the Springs Hill Wastewater Extension and River Oak Lift Station Improvement. A contract was entered into by the City of Seguin, GBRA, and Parcmaison Investments to extend sanitary sewer service to a proposed development southwest of Seguin, called Quails Gate. Under the agreement, GBRA is to design and construct the sanitary sewer expansion. The firm of Claunch and Miller developed plans and specifications for the project. Bids were opened on December 3, 2004. Five bids were received. Upon motion by Director Thomas, seconded by Director Gary, the Board unanimously authorized the General Manager to enter into a contract with Mercer Construction Company of Edna, Texas, for the base bid with alternate two for the construction of the Springs Hill Wastewater Extension and River Oak Lift Station Improvements. The Chairman then called for Action Item 11 - Consideration of and possible action approving a Resolution by the Board of Directors of Guadalupe-Blanco River Authority declaring a public necessity for the acquisition of certain water pipeline easements and temporary construction easements and certain fee estates for the Western Canyon Regional Treated Water Delivery Project or System in connection therewith, over, across, upon and under certain privately owned real properties; authorizing all appropriate action by the General Manager, XLIX 12/15/04 20

staff, and retained attorneys and engineering and technical consultants in the institution and prosecution of condemnation proceedings to acquire any such needed fee estates and easements and temporary construction easements and related rights of ingress and egress that cannot be acquired through negotiation; declaring further negotiations futile; ratifying and affirming all acts and proceedings heretofore done or initiated by employees, agents, and attorneys of GBRA to acquire such property interests; authorizing all other lawful action necessary and incidental to such acquisitions or eminent domain proceedings to survey, specify, define, and secure the necessary interests in real property; declaring the sections of the Resolution to be severable one from the other in the event any section of this Resolution is determined to be invalid; said properties to be identified to wit: Tract H-14 Francis Dale Massey, fee simple interest; Gary H. Moore, easement interest; Donald Edward Massey, easement interest, being approximately.038 acre of permanent easement and.064 acre of temporary easement, and being a portion of land out of a 60 foot road easement for ingress and egress as recorded and conveyed to Francis Dale Massey in Volume 354, Pages 165-180 of the Official Records of Kendall County, Texas, out of the J.R. Arocha Survey No. 171, Abstract 2 of Kendall County, Texas, attached as Exhibit A ; Tract H-15 Francis Dale Massey, being approximately 1.476 acre of permanent easement and 2.460 acre of temporary easement, and being out of the remaining portion of 220.875 acre tract of land as recorded and conveyed to Francis Dale Massey in Volume 375, Pages 863-865 of the Official Records of XLIX 12/15/04 21

Kendall County, Texas, out of the Jose Ramon Arocha Survey No. 171, Abstract 2 of Kendall County, Texas, attached as Exhibit B ; and Tract J-7B Terrence E. Ciliske and Kathleen B. Ciliske, being approximately.104 acre of permanent easement and.145 acre of temporary easement, and being a portion out of Lot 104, Block 1, Saddleridge Subdivision Unit 1 recorded in Volume 13, Page 42-48 of the Map and Plat Records of Comal County, Texas, attached as Exhibit C. Water supply agreements for treated water service by GBRA from the Western Canyon Regional Treated Water Supply Project have been executed with San Antonio Water System, San Antonio River Authority, the City of Boerne, the City of Fair Oaks Ranch, the City of Bulverde, Tapatio Springs Resorts/Kendall Water Utility, Cordillera Ranch and Johnson Ranch. Upon motion by Director Gary, seconded by Director Pagel, the Board unanimously approved a Resolution by the Board of Directors of Guadalupe- Blanco River Authority declaring a public necessity for the acquisition of certain water pipeline easements and temporary construction easements and certain fee estates for the Western Canyon Regional Treated Water Delivery Project or System in connection therewith, over, across, upon and under certain privately owned real properties; authorized all appropriate action by the General Manager, staff, and retained attorneys and engineering and technical consultants in the institution and prosecution of condemnation proceedings to acquire any such needed fee estates and easements and temporary construction easements and related rights of ingress and egress that cannot be acquired through negotiation; declared further negotiations futile; ratified and affirmed all acts and proceedings heretofore done or initiated by employees, agents, XLIX 12/15/04 22

and attorneys of GBRA to acquire such property interests; authorized all other lawful action necessary and incidental to such acquisitions or eminent domain proceedings to survey, specify, define, and secure the necessary interests in real property; declared the sections of the Resolution to be severable one from the other in the event any section of this Resolution is determined to be invalid. A copy of the Resolution is attached and made a part of these minutes. Chairman Wilson stated the serious nature of property acquisition and the fact that the GBRA staff makes all efforts possible to acquire easements and property by negotiation. Next, the Chairman called for Action Item 12 - Consideration of and possible action approving a Resolution by the Board of Directors of Guadalupe-Blanco River Authority declaring a public necessity for the acquisition of certain water pipeline easements and temporary construction easements and certain fee estates for the IH-35 Water Transmission Main Project in connection therewith, over, across, upon and under certain privately owned and public properties; authorizing all appropriate action by the General Manager, staff, and retained attorneys and engineering and technical consultants in the institution and prosecution of condemnation proceedings to acquire any such needed fee estates and easements and temporary construction easements and related rights of ingress and egress that cannot be acquired through negotiation; declaring further negotiations futile; ratifying and affirming all acts and proceedings heretofore done or initiated by employees, agents, and attorneys of GBRA to XLIX 12/15/04 23

acquire such property interests; authorizing all other lawful action necessary and incidental to such acquisitions or eminent domain proceedings to survey, specify, define, and secure the necessary interests in real property, declaring the sections of the Resolution to be severable one from the other in the event any section of this Resolution is determined to be invalid; said properties to be identified to wit: Tract A-8 Broadway National Bank, Trustee of the J.K. Lennie Trust, being approximately 1.049 acre of permanent easement, and.793 acre of temporary easement, and being a portion out of 55.00 acre tract of land in the Thomas Yates League Survey, Abstract No. 313, described in Original Deed Records in Volume 300, Page 802 of the Official Public Records of Caldwell County, Texas, attached as Exhibit A ; Tract A-9 Broadway National Bank, Trustee of the H.W. Lennie Trust, being approximately.852 acre of permanent easement, and.639 acre of temporary easement, and being a portion out of 45.00 acre tract of land, Tract 2, in the Thomas Yates Survey, Abstract No. 313, described in Original Plat Recorded in Volume 300, Page 800 of the Official Public Records of Caldwell County, Texas, attached as Exhibit B ; Tract B-20A Veterans Land Board of Texas with equitable interest in Thomas James Kirk, Jr. and Gwendolyn C. Kirk, being approximately.125 acre of permanent easement, and 0.158 acre of temporary easement, and being a portion out of 16.000 acre tract of land in the M.B. Atkinson Survey, Abstract No. 21, described in Deed recorded in Volume 2442, Page 192 of the Deed Records of Hays County, Texas, attached as Exhibit C ; Tract B-20B Veterans Land Board of Texas with XLIX 12/15/04 24

equitable interest in Thomas J. Kirk, Jr., being approximately.746 acre of permanent easement, and.996 acre of temporary easement, and being a portion out of 12.517 acre tract of land in the M.B. Atkinson Survey, Abstract No. 21, described in Deed Recorded in Volume 2442, Page 188 of the Deed Records of Hays County, Texas, attached Exhibit D ; and Tract B-20C Timothy J. Smith, being approximately.008 acre of permanent easement, and being a portion out of 7.020 acre tract of lane in the M.B. Atkinson Survey, Abstract No. 21, described in Deed recorded in Volume 2442, Page 184 of the Deed Records of Hays County, Texas, attached Exhibit E. Water supply agreements for delivery of treated water service by GBRA from the IH-35 Water Transmission Main Project have been executed among the City of Kyle, the City of Buda, GoForth Water Supply Corporation, and GBRA. Upon motion by Director Schneider, seconded by Director Gary, the Board unanimously approved a Resolution by the Board of Directors of Guadalupe-Blanco River Authority declaring a public necessity for the acquisition of certain water pipeline easements and temporary construction easements and certain fee estates for the IH-35 Water Transmission Main Project in connection therewith, over, across, upon and under certain privately owned and public properties; authorized all appropriate action by the General Manager, staff, and retained attorneys and engineering and technical consultants in the institution and prosecution of condemnation proceedings to acquire any such needed fee estates and easements and temporary construction easements and related rights of ingress and egress that cannot be acquired through negotiation; declared further negotiations futile; ratified and affirmed all acts and proceedings XLIX 12/15/04 25

heretofore done or initiated by employees, agents, and attorneys of GBRA to acquire such property interests; authorized all other lawful action necessary and incidental to such acquisitions or eminent domain proceedings to survey, specify, define, and secure the necessary interests in real property, declared the sections of the Resolution to be severable one from the other in the event any section of this Resolution is determined to be invalid. A copy of the Resolution is attached and made a part of these minutes. Chairman Wilson stated the serious nature of property acquisition and the fact that the GBRA staff makes all efforts possible to acquire easements and property by negotiation. The Chairman then called for Discussion Item 13 - Quarterly update on the GBRA Strategic Plan. The Board was briefed on public communications including improving the customer database, special education projects, school education programs, hazardous mitigation plan, and Lower Guadalupe Water Supply Project communications. Discussion was had regarding Human Resources including maximizing support to supervisors and employees, succession planning, maximizing employees use of the benefits program, and the employee assistance programs. The Board was informed on Finance and Accounting including financial resources for GBRA firm water, rate study, IH 35 Project financing, and the San Marcos Water Treatment Plant operations proposal. The Board was briefed on Projects and Programs including planning for the region s growth, work related to the November flood, construction projects, and acquisition of new run-of-the river water rights. Discussion was then had regarding the first quarter financial status including revenue and expenses, health XLIX 12/15/04 26

insurance, retirement plan contributions, and damage to the Guadalupe Valley Hydroelectric Division TP-4 spillgates. Next, the Chairman called for Discussion Item 14 - Discussion regarding the biennial investment portfolio review. Section 403.304 of the GBRA Investment Policy requires that an investment portfolio review be performed at least every two years. GBRA engaged Scott McIntyre a Senior Portfolio Manger and Certified Financial Analyst with First Southwest Asset Management, Inc. (FSAM) to perform the review. Following the review, FSAM provided GBRA a report of its findings. The report was provided to the GBRA Audit Committee during its November 17, 2004 meeting. The report summary basically states that all held securities are AAA, credit exposure is minimal, liquidity is exceptional, and the portfolio adheres to GBRA s Investment Policy and the Texas Public Funds Investment Act. The Chairman called for Discussion Item 15 - Status report on the IH-35 Project financing. Section 2(x) of GBRA s Enabling Act authorizes GBRA to borrow money and issue negotiable bonds. GBRA s IH 35 Project has been progressing for several months with costs to date approximating $1,100,000. As a result, GBRA longterm financed the Project. The Board previously approved a negotiated sale of the IH 35 bonds (August 18, 2004) and the necessary bond resolution (October 20, 2004) to market and issue this debt. During early November, the staff met with the project participants to give them an update on the project s schedule, estimated costs, debt issuance schedule, and estimated average annual debt service. Since the participants meeting, the staff has actively worked with the financing team to complete the Official XLIX 12/15/04 27

Statement, rate the bonds, solicit bond insurance, and marketed the bonds on December 7, 2004. The bonds were rated by Standard and Poors (A - with a stable outlook) and by Moody s (A3). The Chairman then called for Discussion Item 16 - Discussion regarding land use assumptions and capital improvement plans for the Bulverde area water delivery system and Wimberley area wastewater treatment system. The Interlocal Agreement between the City of Bulverde and GBRA provides that GBRA will design, construct, own and operate a retail water distribution system for the City of Bulverde. To finance the project, it is necessary to establish an impact fee for recovering the capital costs of constructing the system. The Texas Local Government Code, Chapter 395 mandates that land use assumptions and a Capital Improvement Plan (CIP) be developed that considers the projected system demands for a ten-year period. The land use assumptions and CIP were reviewed and discussed by the Bulverde Capital Improvement Committee. The Committee subsequently approved the plan developed by Pape-Dawson Engineers. The Bulverde Capital Improvement Plan Committee met on November 11, 2004 and December 1, 2004 to review and discuss land use assumptions and the Capital Improvement Plan. The Bulverde water CCN encompasses approximately 60,000 acres. Development has been initiated in three primary areas that include the Highway 46 and U.S. 281 intersection, the area near Smithson Valley High School and areas near Fair Oaks Ranch in far western Comal County. These areas would be considered in Phase 1 of the CIP with improvements being constructed within a five year period. Phase 2 improvements are projected to XLIX 12/15/04 28

occur within the five to ten year period. The estimated cost of Phases 1 and 2 improvements is $10,990,367. A total of 2540 equivalent dwelling units (EDU s) would be supported in the initial ten year period. The land use assumptions incorporated into the proposed Capital Improvement Plan correspond to the City of Bulverde s zoning plans and ordinances, receiving concurrence from the City s Planning Director and Planning Commission Chair. The Village of Wimberley is following a process similar to the City of Bulverde. Next, the Chairman called for Discussion Item 17 - Discussion regarding the Lower Guadalupe Water Supply Project. The Board was briefed on budget amendments for the Texas A&M University Whooping Crane Study, groundwater studies, environmental studies, and the up-coming technical forum meeting. Discussion was also had regarding the technical forum meeting, citizens forum meetings, and the LGWSP website. The Chairman called for Discussion Item 18 - Discussion regarding Base Flow Report, Water Quality Index, and condition of the Guadalupe Basin. The reports were discussed with the Board. The Board was given an overview of the November 22, 2004 flood event and other major flood events in 2004. There have been five events to date in 2004. The Board was briefed on flow data with November 2004 having the most amount of rainfall in one month since 1856. Discussion was had regarding rainfall amounts in the river basin, high water flow peaks on the Guadalupe River, flood hydrographs, flood flow travel times from Gonzales to Victoria, gauge reference levels and historical floods, damages to homes and GBRA s hydroelectric XLIX 12/15/04 29

dams, and Canyon Reservoir s elevation. The Board was briefed on the status of the log jams in the lower reaches of the Guadalupe River. There is a log jam at river mile 19 and below Highway 35, and a log jam on San Antonio River beginning at Fagan Bridge. Calhoun Canal Division employees have been working on the log jams above the Salt Water Barrier. GBRA crews will continue working on the log jam below Highway 35 next week. The new GBRA work barge (Miss Guadalupe II) and the work boat (Miss Guadalupe) are both being used to clear the log jams as quickly as possible. The San Antonio River log jams will be cleared after land dries which will probably be after the first of the year. Next, the Chairman called for Discussion Item 19 - Discussion regarding the Revised Draft 2004 Texas Water Quality Inventory, 303(d) list and 305(b) list. The Federal Clean Water Act requires an inventory of all bodies of water. The Board was briefed on Total Maximum Daily Load (TMDL) studies currently being conducted in the GBRA Basin for Peach Creek, Sandies Creek, Elm Creek, Guadalupe River above Canyon Reservoir, and Camp Meeting Creek. The Board was informed on how classified stream segments are identified, the implementation plan of TMDL requirements, reliability of bacterial impairment studies, and best management plans that may be implemented after studies are complete. The Chairman called for Discussion Item 20 - Presentation regarding environmental flows by Robert J. Brandes, P.E., Ph.D. General Manager West introduced Dr. Brandes to the Board. Dr. Brandes serves on the Scientific Advisory Committee of the Study Commission on Environmental Flows. Dr. Brandes discussed XLIX 12/15/04 30

environmental flows issues throughout the State of Texas. The Science Advisory Committee was charged with identifying current hydrologic conditions of bays and estuaries, evaluating the existing tools used by State agencies, and identifying the ecology in the State. The Scientific Advisory Committee produced a report of the findings and presented them to the Study Commission on Environment Flows. The report identifies that a one size fits all standard does not work for the State of Texas, found that future scientific studies need specific studies that address the ecosystem, on going programs need to be completed on freshwater inflow studies, there needs to be a more concerted effort between the respective agencies, that river and streams estimate methods are substantially lacking in a scientific method for water rights, the bays and estuaries inflow requirements methods need to be expanded to include drought methodology, and that adaptive management science is needed to identify environmental flows. Past water right permits and environmental flow restrictions were addressed. Implementation of environmental flow requirements was discussed for areas throughout the State. Market base strategies need to be addressed by the Legislature and the State. The draft proposal strategy for protection of environmental flows to be presented to the 79 th Legislature was discussed with the Board. Instream flow and bay and estuary flow regimes were discussed. The Chairman then called for Items from the General Manager 21 - Discussion regarding Senate Bill 1 planning and water resource issues. The Board was briefed on South Central Texas Regional Planning Group planning activities including the budget, members of the Committee, County water demands, water supply XLIX 12/15/04 31

options, a letter from the staff of Texas Water Development Board regarding policy issues for upcoming legislative session, a resolution from the Planning Committee supporting brush management, projects of the Canyon Regional Water Authority to be considered by the Group, the Texas effort for federal monies, and the Cibolo Creek Watershed Study sponsored by the U. S. Army Corps of Engineers. Next, the Chairman called for Items from the General Manager 22 - Discussion regarding the Edwards Aquifer Authority and South Central Texas Water Advisory Committee. Discussion was had regarding meetings of the Edwards Aquifer Authority, the Summary of the Habitat Conservation Plan comments, reports from the Senate and House Oversight Committees, and junior-senior water rights/permits. The Board was briefed on the appeal by the South Central Texas Water Advisory Committee to EAA relating to water right permits and the continuance granted by the Texas Commission on Environmental Quality. Bob Keith briefed the Board on the comment period relating to the Habitat Conservation Plan has changed from December 3, 2004 to January 21, 2005, and issuance of authorized senior permits in 2005. The Chairman called for Items from the General Manager 23 - Status report regarding the Guadalupe-Blanco River Trust. The Board was briefed on activities of the Trust. Troy Littrell representing the U. S. Fish and Wildlife Service briefed the Board on a project between GBRA, the Trust and the Aransas National Wildlife Refuge. The Board was given a presentation on the Aransas National Wildlife Refuge and the Myrtle-Foester Whitmire Unit including the whooping crane, wildlife preservation and XLIX 12/15/04 32

habitat for water fowl, environmental education programs, management of invasive species, rice farming program, cattle grazing program, and a prescribed fire program. The Board was briefed on a Prairie Restoration Project on the Myrtle-Whitmire Unit. The new partnership between GBRA, the Trust and the Aransas Wildlife Refuge was discussed. The Chairman recessed the meeting at 12:15 p.m. The Chairman closed the open meeting and convened the meeting in Executive Session at 12:30 p.m. The meeting reconvened in open session at 1:45 p.m. There being no further business to be brought before the Board, the meeting was adjourned, subject to call by the Chairman. Chairman Secretary XLIX 12/15/04 33